Kinetic Engineering Ltd (KEL) today exited the two-wheeler segment completely by selling its remaining Mahindra Two Wheelers stake to private equity firm Samena Capital for about Rs 182.1 crore.
Kinetic Engineering, the Pune-based company, had originally acquired the stake in November 2008 when group firm Kinetic Motor Company sold its two-wheeler business assets to M&M in a cash and stock deal. Subsequently, the home-grown auto major merged Kinetic Engineering with itself in 2012.
According to Kinetic Engineering, the deal with Samena Capital involves certain committed payments, including NCD repayments and cost of financing. The net proceeds would be around Rs 109.8 crore, which KEL will use for its business operations.
Commenting on the transaction, Kinetic Engineering Vice-Chairperson Sulajja Firodia Motwani said the stake divestment is done to focus more on the automotive systems business.
"We will utilise the proceeds to meet various obligations of the automotive systems business, including working capital and FCCBs/debt repayment requirements to strengthen our balance sheet," she said.
Ambit Capital was the sole financial adviser to Kinetic Engineering for this transaction.
Kinetic Engineering is currently focused on building its automotive systems business through various Group companies.
The Group has made good progress in building a strong base in engine and transmission systems in KEL, motor business in Kinetic Taigene as well as automotive electronics business in the Kinetic-Ducati alliance.
Ramesh Venkataraman, Senior Partner at Samena, said the early success of the 'Centuro' bikes has demonstrated what the Mahindras are capable of and "we look forward to an exciting and fruitful relationship in the years to come."
Set up in 2008, Samena Capital is a principal investment group focused on Asia and has offices in London, Dubai, Hong Kong, Singapore and Mumbai.