Auto components manufacturer Hero Motors on Monday said it had sold a stake of 17.6 per cent in Munjal Kiriu Industries, a joint venture with Japan’s Kiriu Corp, to the co-promoter. Hero Motors thus becomes a minority shareholder in the company.
Under the new arrangement, Hero Motors will hold a stake of 49 per cent in the joint venture, while Kiriu will hold the remaining 51 per cent. Hero Motors declined to disclose the value of the transaction.
“To lead Munjal Kiriu Industries (MKI) towards more sustainable growth and financial stability, the two partners have determined to make MKI a consolidated affiliate of Kiriu by changing the percentage of shareholding from the previous 33.4 per cent to 51 per cent,” Hero Motors said in a statement. The firm also said HML Managing Director Pankaj Munjal has been elevated to the post of chairman, MKI.
Junichi Hashiguchi, president and representative director, Kiriu Corporation, said, “The new management team will be functional enough to gear up improving overall levels of quality, cost competitiveness and delivery indicators with Kiriu’s initiative and Hero’s support.” MKI also plans to invest Rs 160 crore over the next two years to expand its existing capacity. The company will install another new casting line in the current Manesar plant by the second half of 2012 in order to ramp up production and meet the apidly increasing demand of the automotive industry.
