Reva Electric Car's plans to raise $15 million private equity funds has fallen apart. |
The company which was to raise the fund from International Finance Corporation (IFC) along with a clutch of Indian and overseas investors has run into trouble with a few of these investors having a relook at investing in Reva. |
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Chetan Maini, managing director, said: "We are having to relook at our fund raising options as some investors other than IFC are rethinking. We are in active discussions with others and we will try to tie this up at the earliest." |
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The company was planning to raise $15 million to increase its capacity, fund diversification initiatives, widen the distribution network and open up newer export markets. |
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According to Reva, $20 million has been invested thus far and an additional $15 million is required to capture latent market demand through increasing market depth and to develop new products to increase market width. |
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With the total project cost (including historical investments) estimated at $35 million, Reva has contributed $18 million (51.4 per cent of the cost), taken on a long term debt of $3 million (8.6 per cent of the cost) and proposes to raise $14 million (40 per cent of the cost) from private equity investors. Reva had approached IFC to provide equity financing of $ 2 million. |
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Reva has a manufacturing capacity of 6,000 cars per annum on a 3-shift basis and proposes to expand capacity to 50,000 cars per annum to exploit potential demand. Since 2001 to 2004-05, the company has so far sold 1,100 cars. |
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In addition to its existing model, the company has developed next-generation prototypes of vehicles ranging from a hatchback to a mini-bus, besides having conceptualised a mini-taxi. |
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Further, the company has tested the conversion of existing conventional vehicles into electric vehicles. |
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The group has a turnover of around Rs 80 crore and the car business accounts for Rs 10-12 crore. The group employs over 1,500 people. |
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It has three R&D centres, all of which have been certified and recognised by the Government of India. |
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