PUNE: Kinetic Engineering (KEL) board has approved the merger of Kinetic Motor (KMCL) with self in the swap ratio of 31 shares of KMCL for every four of KEL. The merged entity will now hold Kinetic Motor's 17% stake in Mahindra Two Wheelers.
The board has also approved the appointment of Sulajja Firodia Motwani, a director of the company, as vice chairperson of the merged entity.
"KEL's stake in Mahindra Two Wheelers was indirectly, through Kinetic Motor which had no significant operations. KMCL was predominantly becoming an investment arm. Now, we have a clean and focused structure and this is the culmination of the restructuring in KEL," said Motwani said.
Kinetic Engineering, which used to make mopeds and motorcycles, had moved its automotive original equipment manufacturing business to Kinetic Motor to become an automotive systems and powertrain components supplier.
In quarter ended September 30, Kinetic Engineering's losses jumped more than threefold from a year ago to Rs 7 crore. Its net sales fell to Rs 21.27 crore from Rs 24.54 crore a year earlier. In fiscal 2010-11, KEL had reported net sales of Rs 90.03 crore and net loss of Rs 10.93 crore.
Kinetic Engineering has lowered its total debt to Rs 23 crore from Rs 105 crore a year ago through a sale of non-core assets such as land and from profits earned through stake sale in KMCL to Mahindra group. Motwani said, "We would like to reduce this debt through sale of non-core and non-operative assets," which could be parcels of land that the group holds.
KEL has received approval from the Reserve Bank of India to extend the tenure of its $18-million foreign currency convertible bonds by a year.
Source -
Kinetic Motor to merge with KEL - The Economic Times
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12-10-2011, 01:41 PM
Kinetic Motor to merge with KEL
