Mellon Financial close to investing $15 mn in Reva

Mellon Financial Corporation, a US-based financial conglomerate, is likely to invest $15 million in Reva Electric Car Company (RECC). International Finance Corportion is also expected to invest $1 million soon.

The Bangalore-based firm finally seems to have found an investor to expand market reach of its environment- friendly concept.

While a Mellon spokesperson did not comment on this, Chetan Maini, MD, RECC neither confirmed nor denied the development. "We have got expressions of interest from various institutions and things will be finalised in a couple of weeks," Maini added.

If this development works out, Reva is likely to increase its production capacity, fund diversification initiatives, widen its distribution network and enter new export markets.

Apart from the past investments, the company requires an additional $15 million to capture the latent market demand. This will be done by increasing the depth and width of the market.

The project is estimated to cost around $35 million. Of the total amount, the company has contributed $18 million and taken a long-term debt of $3 million. It proposes to raise the remaining from private equity investors.

In addition to its existing models, the company has developed the next-generation prototypes of vehicles ranging from a hatchback to a mini-bus. It has also conceptualised a mini-taxi.

The company has also tested the feasibility of converting existing vehicles into electric vehicles.

Currently, around 1,000 Reva cars are on roads in India and another 500 in Europe and Japan. The UK and Japan provide subsidies to environment friendly vehicles.