Honda Acquires Usha International's Stake In JV
Honda Motor Corporation has acquired 3.16% stake in JV - Honda Siel Cars India from JV partner Usha International Limited for R180Cr.
Usha International has sold 18 Mn shares in the JV at R100 per share to Honda Motor Company, Japan. The deal includes a non-compete fee paid to Usha by Honda.
The proceeds from the stake sale would be applied to the normal development of Usha's business.
Post deal, Siddharth Shriram will cease to be a Director and the Chairman of the HSCI board.
HSCI was incorporated in December 1995 to provide Honda’s latest passenger car models and technologies, to the Indian customers.
Currently, the company has two manufacturing facilities at Greater Noida in Uttar Pradesh and Tapukara in Rajasthan.
HSCI sells passenger vehicles like Honda Jazz, Honda City, Honda Civic and Honda Accord, which are produced at the Greater Noida facility. The premium utility vehicle CR-V is imported from Japan as completely built unit.
Honda Siel Cars has network includes 135 authorised dealership facilities in 83 cities acros the country. HSCI dealerships are based on the '3S Facility' (Sales, Service, Spares) format, offering complete range of services to its customers.
Siel Limited, which is currently known an Mawana Sugars after the amalgmation with the latter in 2008, had 40% stake in HSCI when it entered in to a JV with Honda in 1995. But later it sold over 38% to Honda, with an option to buy back, to part-finance the Siddharth Shriram group’s expansion plans.
Honda and Usha had been fighting over the valuation of Usha International's stake in the JV for several months. Ernst & Young, appointed by Honda Siel Cars, had reported a valuation of 63.60 a share, while KPMG had given a value of 182 a share, according toET.
Last Sept, Siel bought shares from Honda at a price of Rs52.80 a piece to increase its stake to 5% from 2.6% earlier.
In March 2011, Honda had subscribed to a rights issue of HSCI at Rs57.1 per share, in which Siel did not participate. Following this, Siel’s stake in HSCI came down to 3.16%, according to moneylife.
Last 2010, Honda split with its 26 years old partner in the motorcycle business, Hero group to focus on Indian market on its own.
In this space, last year Force Motor exited it's JV - MAN Force Trucks by selling 50% stake to JV partner MAN Truck & Bus AG for $203Mn. Another split was between M&M and Renault over the Logan sedan issue. M&M bought 49% stake of Renault while Hero Motors has agreed to purchase 26% stake of Honda.
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|19 Kasturba Ganbhi Marg,New Delhi,Delhi-110001.||http://www.ushainternational.com|
|Honda Siel Cars India Limited||Honda Motor India Private Limited||3 & 4 / 48, Enkay House, 2nd Floor, Malcha Marg Shopping Complex, Chanakya Puri.||http://www.hondacarindia.com|
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