KEL TO BUY HONDA STAKE IN JV WITH CAR-PROJECT FUNDS
Article Abstract:
Kinetic Engineering Ltd (KEL) has decided to invest Rs35 crore to buy Honda's 51 percent stake in its joint venture Kinetic Honda Motor Ltd (KHML). The amount was kept aside for a small car project but the project was suspended because the company could not convince the government to fix a 15 percent excise duty instead of a regular 40 percent since the car is in 500 cc category. KEL is to acquire Honda's 51 percent stake at Rs45 per share. With this acquisition, KEL would have an equity of 70 percent from the current 19 percent in KHML's total equity of Rs83 crore. However, Honda continues to give the technical assistance and components for KHML and it would be paid for the CKD kits and royalty. KEL alone has invested Rs50 crore to supply gears and shafts to KHML. It supplies eight components which constitute less than 10 percent of the material contents of Kinetic Honda scooter. KHML continues to export scooters under the Honda brand name. Currently, KHML has a capacity of 175,000 units and Honda has promised to help the company to develop four stroke scooters. KEL has a two wheeler capacity of 313,000 units. KEL targets a turnover of Rs2,000 crore. (um)
Comment:
Kinetic Engineering decides to invest Rs35 crore to buy this co's 51% stake in its joint venture Kinetic Honda Motor
Publication Name: Economic Times
Subject: Business, international
ISSN: 0013-0389
Year: 1998
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SRL MD & Co GO FOR OPEN OFFER TO CONSOLIDATE STAKE
Article Abstract:
Mr Madan Mohan Reddy, managing director of Srichakra Remedies Ltd (SRL) and his associates have made an open offer to acquire 1,320,000 equity shares in SRL at a cost of Rs6 each to consolidate their stake in the company. These shares account for 20 percent of the issued share capital of the company. Each month, SRL allocates around Rs90 lakh for paying the interest dues and it has borrowed Rs4.50 crore from financial institutions and banks as term loans. At present, Madan Mohan Reddy and his associates hold around 267,400 shares in SRL, representing 4.05 percent of the equity of 66 lakh shares of Rs10 each. SRL manufactures bulk drugs and its plant is located at Borapatla village in Medak district of Andhra Pradesh. (gsh)
Publication Name: Economic Times
Subject: Business, international
ISSN: 0013-0389
Year: 1998
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