Hero MotoCorp picks up 49.2% stake in EBR for $25mn
The country's largest two-wheeler maker Hero MotoCorp today said it has picked up 49.2% stake in US-based Erik Buell Racing (EBR) for $25 million (about Rs 148 crore).Updated: Jul 01, 2013 11:15 IST
The country's largest two-wheeler maker Hero MotoCorp on Monday said it has picked up 49.2% stake in US-based Erik Buell Racing (EBR) for $25 million (about Rs 148 crore).
The company has incorporated a wholly-owned subsidiary in the US by the name of HMCL (NA), Inc for the purposes of investing in Erik Buell Racing, Inc, Hero MotoCorp (HMC) said in a filing to the BSE.
"HMCL(NA) has agreed to invest $25 million in EBR for a total stake of 49.2% in the share capital of EBR. The first tranche of $15 million has been invested by HMCL (NA) on June 28, 2013," it added.
The second tranche of $10 million is proposed to be invested within the next nine months, the company added. Last year Hero MotoCorp had entered into technology sourcing pact with EBR as it looks to strengthen presence in the high-end bike segment.
The development is a part of the Indian firm's strategy to enhance technological prowess, post the break up of the erstwhile joint venture with Honda -- Hero Honda.
The idea behind entering into partnership with EBR was a part of HMC's overall strategy to have multiple technology source for different segments and enhance its own R&D capability.
In December 2010, the Hero Group and Honda had agreed to end their 26-year-old relationship, with the Indian partner agreeing to buy out Honda's 26% stake in Hero Honda for Rs 3,841.83 crore.
The two erstwhile partners had, however, signed a new licensing agreement under which Hero will pay Honda 45 billion yen(about Rs 2,450 crore) till 2014.
Shares of HMC were trading at Rs 1,677.55 on the BSE in morning trade, up 0.92% from their previous close.