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Kinetic exits Mahindra Two Wheelers by selling stakes to Samena Capital

Tuesday, 25 February 2014 - 6:00am IST | Place: Mumbai | Agency: dna

Sells 20% stake to Samena Capital for Rs 180 crore.

Pune-based Kinetic Engineering has sold off its entire stake in Mahindra Two Wheelers for Rs 182 crore to Samena Capital, a private equity investment group.

Kinetic Group had acquired the stake in November 2008, when its group company, Kinetic Motor Co, sold its two-wheeler business assets to Mahindra Two Wheelers, for cash as well as a 20% equity stake.

Kinetic Motor Co was merged with Kinetic Engineering in 2012 and, as a result, the stake was transferred to the latter.

According to the statement issued by Kinetic Engineering, the company will receive a consideration of around Rs 182.1 crore, and after certain committed payments, including NCD repayments, cost of financing, etc, the net proceeds would amount to approximately Rs 109.8 crore.

Mahindra Two Wheelers is currently in the process of merging into Mahindra & Mahindra.

"Kinetic is extremely proud of its partnership with M&M. 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," said Sulajja Firodia Motwani, vice chairperson of Kinetic Engineering.

The company will utilise the proceeds to meet various obligations of this business, including working capital and foreign currency convertible bonds/debt repayments.

Before selling its business to Mahindra Two Wheelers, Firodias-run Kinectic Motor sold two wheelers under the brand names Kinetic Honda and then Kinetic. The company sold Kinetic Luna moped in India, which was also exported to markets like Brazil and Argentina.

The company later established a joint venture with Japanese manufacturer – Honda Motor Co, which sold Kinetic Honda scooters, with electric start. They both separated in 1998.

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