Kinetic divests entire Mahindra Two Wheelers’ stake to Samena Capital

Firodia Group-promoted Kinetic Engineering Ltd (KEL) has sold its entire remaining 20-per cent equity stake in Mahindra Two Wheelers Ltd (MTWL) to Samena Capital, a private equity investment group focused on Asia and the Middle East, for Rs182.1 crore.

KEL, the component making company of the Pune-based Firodia family, will get about Rs 109.8 crore after committed payments including non-convertible debenture and cost of financing among others. KEL will use the proceeds for its business operations, it said in a statement.

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 per cent equity stake. Subsequently, KMCL was merged with KEL in 2012 as a result the stake had been transferred to the latter.

In 2008 utility vehicles and tractor maker Mahindra & Mahindra had acquired Kinetic Motors in a Rs110-crore all-cash deal and moved it to a new company in which Kinetic held a 20-per cent stake and M&M the remaining (See: M&M in aquisition deal with Kinetic Motors). 

Later in 2011, the Firodia Group announced the merger of its Kinetic Engineering (KEL) and Kinetic Motor Company (KMCL) (Firodias to merge KEL and KMCL).

''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,'' said Sulajja Firodia Motwani, Vice Chairperson of KEL.

''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,'' she added.

KEL will use the proceeds to meet various obligations of this automotive systems business including working capital and foreign currency convertible bonds and debt repayment requirements.

''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,'' said Anoop Mathur, President, Two Wheeler Sector at Mahindra & Mahindra.

Set up in 2008, Samena Capital is a principal investment group focused on Asia and the Middle East.