Kinetic exits Mahindra 2 Wheelers; sells stake for Rs 182cr

Tags: Companies
Kinetic Engineering Ltd (KEL) today exited the two-wheeler segment completely by selling its remaining stake in Mahindra Two Wheelers to private equity firm Samena Capital for about Rs 182.1 crore.

The Pune-based company had originally acquired the stake in November 2008 when Group firm Kinetic Motor Company sold its two-wheeler business assets to M&M in a cash and stock deal. Subsequently, the home-grown auto major merged Kinetic Engineering with itself in 2012.

According to the company, the deal with Samena Capital involves certain committed payments, including NCD repayments and cost of financing. The net proceeds would be around Rs 109.8 crore, which KEL will use for its business operations.

Commenting on the transaction, KEL Vice-Chairperson Sulajja Firodia Motwani said the stake divestment is done to focus more on the automotive systems business.

"We will utilise the proceeds to meet various obligations of the automotive systems business, including working capital and FCCBs/debt repayment requirements to strengthen our balance sheet," she said.

Ambit Capital was the sole financial adviser to KEL for this transaction.

Kinetic is currently focused on building its automotive systems business through various Group companies.

The Group has made good progress in building a strong base in engine and transmission systems in KEL, motor business in Kinetic Taigene as well as automotive electronics business in the Kinetic-Ducati alliance.

Ramesh Venkataraman, Senior Partner at Samena, said the early success of the 'Centuro' bikes has demonstrated what the Mahindras are capable of and "we look forward to an exciting and fruitful relationship in the years to come."

Set up in 2008, Samena is a principal investment group focused on Asia and has offices in London, Dubai, Hong Kong, Singapore and Mumbai.

EDITORIAL OF THE DAY

  • Reservations, along with economic subsidies, must go to get India moving

    A young man, in his early twenties, starts an agitation demanding reservation for the community he represents.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

Sarthak Raychaudhuri

vice-president, HR, Asia South Whirlpool of India

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

TODAY'S COLUMNS

Urs Schoettli

The China story isn’t over yet

China’s financial markets are currently in the eye of a ...

Anuja Sharma

Love yourself to love others

“There are two basic motivating forces: fear and love. When ...

Gautam Gupta

It's a 'blog eat blog' world out there

Let me tell you, fashion journalism has truly taken the ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture