Sulajja Firodia Motwani, joint managing director, says the company would work towards operationalising its branding plans over the next two months after the transaction involving the transfer of the business to a new Mahindra & Mahindra-led joint venture company (See: M&M in aquisition deal with Kinetic Motors), expected to be named Mahindra-Kinetic Scooters.

"The Kinetic brand for two-wheelers would be licensed to the new company. The Kinetic brand for all other segments such as auto components, elevators and infrastructure areas would continue to belong to Kinetic," she said.

She added that the Rs110 crore cash consideration M&M would pay it, would be be used by Kinetic Motor to clear its liabilities, while the 20-per cent minority stake in the new company would be long-term value creation for Kinetic shareholders.

Motwani will be the non-executive director in the new company to be led by Anoop Mathur from Mahindra & Mahindra, who will spearhead M&M's entry into the two-wheeler segment. Mathur is president designate of the Mahindra & Mahindra two-wheeler business.

According to Newswire 18, M&M said it will need to hike vehicle prices and the time frame is undecided. 

According to CNBC-TV18's Swati Khandelwal, the structure of the deal is such that Mahindra & Mahindra and Kinetic will jointly set up the new company, Mahindra-Kinetic Scooters.

Mahindra & Mahindra have paid Rs 110 crore in cash to Kinetic Motor for the assets it has bought. The assets include the infrastructure, research and development models, etc. The auto major will have control of 80% stake in the new company and 20% would be held by Kinetic Motors.

Mahindra & Mahindra will now get access to making two-wheelers. That is the first time they will enter into that space. It is a strategic fit for Mahindra because it has its in-house design and competencies with Mahindra Engineering Services. They have also recently bought an Italian design firm- Engines Engineering. So, that makes a strategic fit for Mahindra. They will sell high-end motorcycles and scooters in India and the domestic market.

CNBC-TV18 shares with domain-b its exclusive interview with Firodia:

How much money will be used to pay off the debt that the company already has?
The cash consideration that will be received up front will be used by Kinetic Motors to clear its liabilities and the 20-per cent stake that we would have would be sourced as long-term value creation for our shareholders.

How much is the debt? What is the amount and by when will you clear that?
We would declare all the detail plans over the next two-three months as we move towards the closure of the transaction and work out the long-term strategy for the new business model for Kinetic Motor Company.

What happens to the existing products and the models that you sell? What happens to the deal with SYM and Italjet; the scooters that you sell with those two companies? Will they remain in the new company? Would they still be the technology partners in the new company?
SYM will continue to partner us in two ways: they would continue to be a shareholder in Kinetic Motor Company and would become technical partners to the new alliance. So, it is a three-way marriage with Kinetic and M&M as a strategic partners and SYM as a technical support in scooters for the new venture.

The new company will now manufacture the Italjet model. In a way we are trying to leverage and synergize as much as possible on operations, marketing, brands as well as research and development.

By when will you finalise the branding?
We would work towards operationalising the plan over the next two months as we try to conclude on the details of the transaction. But the Kinetic brand for two-wheelers would be licensed to the new company. The Kinetic brand for all other segments such as auto components, elevators and nfrastructure areas would continue to belong to Kinetic