Kinetic Engineering (KEL) has sold its entire stake in Mahindra Two-Wheelers Ltd (MTWL) to private equity investment group Samena Capital.
KEL will receive about Rs 182.1 crore after certain committed payments, including non-convertible debenture repayments and cost of financing, among others. KEL will use the net proceeds of about Rs 109.8 crore for its business operations, according to a statement issued on Monday.
Kinetic Group had originally acquired the stake in November 2008 when its group company, Kinetic Motor Company Ltd, 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 was transferred to the latter.
“We are divesting our stake in MTWL in order to invest in meeting the requirements of our automotive systems business in KEL. We will utilise the proceeds to meet various obligations of this business, including working capital and foreign currency convertible bonds and debt repayment requirements to strengthen our balance sheet,” said Sulajja Firodia Motwani, Vice-Chairperson of Kinetic Engineering.