Auto major Mahindra and Mahindra Limited today acquired 55.2 per cent stake in REVA Electric Car Company, a move that would stengthen its position in the Electric Vehicles domain.
With acquisition by M&M through a combination of equity purchase from the promoters and fresh equity infusion of over Rs 45 crore (approx $10 million), the new entity will be renamed as Mahindra Reva Electric Vehicle Company Ltd.
Under the agreement signed between the two companies today and post the buyout, Mahindra REVA will have five nominees from M & M, two from Reva's founder, the Maini family and one of California based AEV LLC, REVA's co-founder.
President of Mahindra Automotive and Farm Equipment Sector, Dr Pawan Goenka was today elected chairman of the newly constituted board.
"It is a very exciting opportunity for Mahindra as it will have one of best technologies available in the electric car space", Goenka told reporters.
He said the electric vehicle space now was not very large as only 3500 REVA cars are on the roads. Over the next five to 10 years, the EV market across the world is expected to grow to 1.5 million to two million vehicles, he said.
In India, Mahindra and Mahindra projects the growth rate for EVs at between 80,000 to 100,000 vehicles by 2020,he said.
M & M will leverage on work already done by REVA in development of new vehicles and also Mahindra's marketing network, he said.
Chetan Maini, who will continue to play a leading role in Mahindra REVA as Chief Technology and Strategy,said authorised capital would be Rs 135 crore and paid up capital Rs 20 crore.
"There are no liabilites or hardly any debt of the company now", he said.