ENP Newswire - 25 February 2014
Release date- 24022014 - Mumbai, : Mahindra Two Wheelers, part of the US$ 16.7 billionMahindra Group, and Kinetic Engineering (KEL) announced today that KEL has sold its entire equity stake in Mahindra Two Wheelers Limited (MTWL) to Samena Capital, a private equity investment group focused on Asia and the Middle East.
Kinetic Group had originally acquired the stake in November 2008, when its group company, Kinetic Motor Company Limited (KMCL), sold its two wheeler business assets to MTWL, for cash as well as a 20% equity stake. Subsequently, KMCL was merged with Kinetic Engineering Limited (KEL) in 2012, as a result the stake had been transferred to the latter.
Kinetic will receive a consideration of approximately Rs. 1821 million and after certain committed payments including NCD repayments, cost of financing etc; the net proceeds would amount to approximately Rs. 1098 million, which KEL will use for its business operations.
Commenting on the transaction, Sulajja Firodia Motwani, Vice Chairperson of Kinetic Engineering said, ''Kinetic is extremely proud of its partnership with M&M. We are certain that MTWL will grow from strength to strength to become a significant player in the two-wheeler industry. Kinetic is now focused on building its Automotive Systems business through its various group companies. We have made good progress in building a business in engine and transmission systems in KEL, motor business in Kinetic Taigene, as well as automotive electronics business in the Kinetic Ducati alliance. We are divesting our stake in MTWL, in order to invest in meeting the requirements of our Automotive Systems business in KEL. We will utilize the proceeds to meet various obligations of this business including working capital and FCCB/ debt repayment requirements to strengthen our balance sheet.'
According to Anoop Mathur, President, Two Wheeler Sector, Mahindra & Mahindra, 'We are happy with our association with the Kinetic Group which enabled us to enter the two wheeler business some years ago. We welcome our new partner Samena Capital at a time when our business is growing strongly driven by rising demand for the Centuro motorcycle which has been developed based on keen consumer insights.'
'We are delighted to be partnering with Mahindra & Mahindra to help build Mahindra Two Wheelers into a leading global player,' said Ramesh Venkataraman, Senior Partner at Samena Capital. 'The early success of Centuro has demonstrated what the organisation is capable of and we look forward to an exciting and fruitful relationship in the years to come.'
Established in 2008, Samena Capital is a principal investment group focused on Asia and the Middle East. Samena Capital's unique model combines a diverse group of business families and entrepreneurs from across the world with experienced investment professionals based in London, Dubai, Hong Kong, Singapore and Mumbai. Ambit, led by Mr. Ashok Wadhwa, acted as the sole financial advisor to KEL for this transaction.
Kinetic Engineering is a part of the Kinetic Group of Companies, a premier automotive and manufacturing group that belongs to the eminent Firodia family of Pune. Kinetic has been a pioneer in the two wheeler industry and has to its credit the launch of India's first moped, Kinetic Luna, as well as India's first advanced technology gearless scooter, the famous Kinetic Honda.
Recently the Group has diversified into Automotive Systems as its key focus area. Kinetic Engineering specializes in Powertrain Systems, including engine and transmission assemblies for 2-wheelers, 3-wheelers, commercial vehicles, and recreational vehicles. Kinetic Engineering has technology collaborations with Magna Steyr of Austria and TGB of Taiwan for the design and development of Transmission Systems.
Kinetic Group's Automotive Systems business also includes Kinetic Taigene, a specialist in Motors, and Kinetic Communications and Kinetic Ducati that specialize in automotive electronics. Kinetic has recently launched a range of green, battery operated vehicles under the banner of Kinetic Green. Kinetic Group is also a leading player in high end elevators, escalators, and moving technologies through KHEMTL, its joint venture company with Hyundai of South Korea.