| Company sources said the board of directors had approved the proposal to issue 8,71,795 compulsorily convertible preferential shares (CCPS) to San Yang for Rs 39 each "" to be converted into equity shares of Rs 10 each with a premium of Rs 29 a share within 18 months. |
| Kinetic Motors will raise Rs 3.55 crore in the process that will give San Yang a 5 per cent equity stake in the company. |
| The $1.1-billion San Yang holds 10.29 per cent in Kinetic Motors through its group affiliate Billion Alley "" acquired in January 2006. |
| The proposed issue of equity will increase its holding to 16 per cent. The stake of the promoter in Kinetic Motors will consequently come down from 53 per cent to 50 per cent. |
| Other important equity stake holders in Kinetic Motors include Bennet & Coleman (publishers of The Times of India), which hold 7.06 per cent, and Citigroup Finance India "" a Citibank venture "" which holds 7.47 per cent. |
| Kinetic Motors Managing Director Sulajja Firodia Motwani could not be reached for comment. The sources, however, said the money being raised would be utilised for the development and marketing of new products that the company would introduce in the market with the San Yang technology. |
| Kinetic has signed a tie-up with San Yang to use the Taiwanese company's 4-valve ceramic coating engines technology to manufacture scooters and motorcycles in India, co-branded Kinetic SYM. |
| The first of such products - the gearless scooter Flyte - was launched in New Delhi on Monday. The sources said the company would have to increase its authorised capital from Rs 85 crore to Rs 88.55 crore. |
| To obtain shareholders' nod to increase the authorised capital and convertible preference shares, an extraordinary general meeting of the company will be held on November 15. |
| Kinetic Motors' sales have been declining in the last four quarters. The company's sales came down to 24.5 crore, reporting a loss of Rs 16.2 crore in the quarter ended June 2007. |
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