Hero allowed to raise Rs4,500-crore FDI for Honda stake buy-out
29 Mar 2011
The Cabinet Committee on Economic Affairs (CCEA) today approved the proposal of the Hero Group to receive foreign direct investment (FDI) to the tune of Rs4,500 crore from private equity firms.
Group investment arm Hero Investments Private Limited will receive investments from Bain Capital and Lathe Investment Private Limited for the buy-out.
The Hero Group and Hero Investment Private Limited had entered into a memorandum of understanding (MoU) with Honda Motors of Japan to acquire its 26 per cent equity in Hero Honda Motors Limited.
Hero Investments Pvt Ltd is one of the main shareholders in the country's largest two-wheeler maker Hero Honda Ltd.
The CEA cleared the proposal at its meeting in New Delhi today.
The Hero Group had earlier proposed to raise funds from BC India Investors II, a part of Bain Capital, and Lathe Investment Pvt Ltd, which jointly were to pick up a 29 per cent stake in Hero Investments Pvt ltd for Rs3,650 crore.