Firodias to merge KEL and KMCL
10 December 2011
The Firodia Group has announced plkans merge its Kinetic Engineering (KEL) and Kinetic Motor Company (KMCL).
A scheme of amalgamation has been proposed and an application will be made to the Bombay High Court.
This would see 4 shares of KEL issued for every 31 shares of KMCL and after the merger, the stakes of the promoters in Kinetic Engineering would stand at 52.85 per cent against 57.49 per cent now.
In November 2008, KMCL transferred the operating assets of its two-wheeler business to Mahindra Two Wheeler (MTWL), for cash and a 20-per cent strategic stake in MTWL.
Speaking to The Hindu newspaper, Sulajja Firodia-Motwani, managing director, KEL, said, KEL had built its business from an automotive business to an automotive systems business. She added the company had invested around Rs55 crore two years ago in a new unit to cater to the demand for theTata Nano. She blaqmed the depressed market for the demand not keeping up with expectations over the last 18 months.
The board of KEL approved resolutions for the appointment of Firodia-Motwani as vice-chairperson of KEL and sought approval from the Reserve Bank of India for the extension of the FCCBs issued by KEL worth $18 million, from February 2013 to February 2014.