Kinetic Engineering, which has restructured itself to an auto-component manufacturer from a motorcycle manufacturer, said it will raise Rs 100 crore to fund its business growth.
AIG to invest Rs 30 cr in the company
MUMBAI: Kinetic Engineering, which has restructured itself to an auto-component manufacturer from a motorcycle manufacturer, on Friday said it will raise Rs 100 crore to fund its business growth.
American Investment Group (AIG) would invest Rs 30 crore in the company by way of subscribing to CCPS (compulsorily convertible preference shares) and the Pune-based company plans to raise an additional Rs 70 crore through FCCBs (foreign currency convertible bonds).
CCPS and FCCBs are proposed at a minimum price of Rs 156. On Thursday, the stock had closed 7% down at Rs 125 on the Bombay Stock Exchange.
The move would see the company equity base, currently at 4.8 million shares, swell to more than double to about 11.2 million shares. AIG would hold about 15% stake in the company post conversion.
Kinetic Engineering plans to utilise the cash thus raised to fulfill working capital requirement and to manufacture gearboxes for the Tata Motors’ proposed small car.
It plans to set up a gear other powertrain components manufacturing facility for the passenger car segment. Other programmes include manufacturing of engines for Italy- based MV Agusta motorcycles, and others. Earlier in the year, the Kinetic group completed its business and financial restructuring under which the two-wheeler manufacturing was consolidated under Kinetic Motors. The auto-component business was retained under Kinetic Engineering.
This is the third round of fund-raising for Kinetic Engineering in the recent past. In August last, it raised Rs 12 crore in private equity from Clear Water Capital against a 13% stake. Reliance Capital has also invested Rs 13 crore in the company for a 14.9% stake.
Being convertible bonds, not all of the above papers have been converted to equity yet and hence when they do, promoter holding—currently at about 40%—is set to fall drastically.
Group company Kinetic Motors has also been active on capital raising front and last year raised close to Rs 100 crore from Citigroup, Rs 14 crore from Taiwan’s SYM, and also from Bennett Coleman and Co.
g_rabin@dnaindia.net
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