Kinetic Engineering and Kinetic Motor to mergeDecember 9th, 2011 - 9:45 pm ICT by IANS
Pune, Dec 9 (IANS) In a strategic move, two Firodia Group companies, Kinetic Engineering and Kinetic Motor, would merge into a single entity.
“We are confident that amalgamation of Kinetic Motor (KMCL) with Kinetic Engineering (KEL) would enhance the shareholders’ value and allow focused course of action for the group,” Arun Firodia, chairman of Kinetic Engineering, said Friday.
The amalgamation would enable participation of investors, strategic partners, lenders and other stakeholders, he said in a statement.
Firodia said the merger would also result in consolidation of the strategic stake that the company has in Mahindra Two-Wheelers Limited (MTWL) into Kinetic Engineering.
“By consolidating the strategic stake of the group in MTWL directly in KEL as a result of this merger, we aim at creating even more value for the shareholders,” Firodia said.
Kinetic Motor sold its two-wheeler business to Mahindra Two Wheeler (MTWL) in 2008 for cash and a 20 percent strategic stake in MTWL.
Kinetic Engineering plans to expand its current automotive systems business to Rs.500 crore a year for the next three-years.
“We intend to build KEL’s current automotive systems business to a size of Rs.500 crore per year in the next three years and also aim at creating further value through the strategic tie-ups such as the stake in MTWL,” Firodia added.
According to the statement, the board of the two companies approved a scheme of merger for both companies. The merger ratio proposes an exchange of four shares of KEL for every 31 shares of KMCL.
“Post the merger, the stake of the promoters in Kinetic Engineering would stand at 52.85 percent from a current stake of 57.49 percent,” the statement.
The KEL board also approved two more resolutions — appointment of Sulajja Firodia Motwani as a vice chairperson of the company and the Reserve Bank of India’s approval for extension of the foreign currency convertible bonds (FCCB) for a year.
The company has issued $18 million worth of FCCBs. It wants the conversion or redemption date extended from February 2013 to February 2014.
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Tags: amalgamation, automotive systems, bank of india, convertible bonds, foreign currency, group companies, kel, kinetic engineering, mahindra, motwani, promoters, reserve bank of india, rs 500, stake, strategic partners, systems business, tie ups, two wheeler, ups, vice chairperson