Honda Siel Power Products on Wednesday said its two promoters -- Japan's Honda Motor Co and India's Usha International -- have terminated their over two-decades old joint venture.
Subsequently, Siddharth Shriram has also resigned as an independent director and chairperson of Honda Siel Power Products with Takahiro Ueda being proposed to be appointed in his place.
The joint venture agreement dated October 25, 1997, entered between Honda Motor Co. Ltd., Japan, and Usha International Limited to create and operate Honda Siel Power Products Ltd (HSSP) as a joint venture has been terminated pursuant to a termination agreement executed on March 31, 2020, HSSP said in a regulatory filing.
The company said its board of directors at a meeting held on Wednesday "deliberated" termination of JV agreement although it is not a party to the agreement.
The board also deliberated on approving re-classification request of Usha International Ltd from 'Promoter and Promoter Group' category to 'Public' category.
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As on quarter ended December 31, 2019, Honda Motor Co held 66.67 per cent in HSSP with the Indian partner Usha International Ltd having 1 per cent stake.
HSSP further said its board also said the agreement between Honda and Usha International permitting the usage of the name 'Siel' as part of the name of Honda Siel Power Products Ltd stands terminated.
HSSP is a leading player in power products industry, manufacturing and marketing a range of portable generators, water pumps, tillers and general purpose engine. It also markets lawn mower, brush cutter and long-tailed outboard motors. It has a manufacturing facility at Greater Noida.
This is the second joint venture between the two parties which has been terminated.
In August 2012, Usha International exited from its then joint venture -- Honda Siels Cars India -- with Honda Motor Company by selling its entire 3.16 per cent stake to the Japanese partner for Rs 180 crore.
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