New Delhi: Munjals-owned auto component manufacturing company Hero Motor Ltd on Monday sold 17% stake in its joint venture company Munjal Kiriu Industries Pvt Ltd (MKIPL) to Japan-based co-promoter Kiriu Corp.
“The parent companies also changed its capital structure. HML will be reducing stake from 66.60% to 49%,” Hero Motor said in a release. The companies did not disclose the financial details of the deal.
The joint venture company will invest Rs160 crore for expansion of its existing facility in the next two years.
“MKI will install another new casting line in the current Manesar plant by the latter half of 2012 to ramp up production in response to the rapidly increasing demand of the Indian automotive industry,” the release said.
Kiriu, a part of Sumitomo Corp., will strengthen its shareholding following the acquisition of stake from HML to become a majority partner. “To lead MKI towards more sustainable growth and financial stability two partners have determined to make MKI a consolidated affiliate of Kiriu by changing the percentage of shareholding from the previous 33.4% to 51%,” the release said.
Pankaj Munjal, managing director of Hero Motors Ltd, has been elevated to chairman of MKIPL.