Search the Internet          Tips  Sites: Finance, Investment

No plans to merge group companies: Kinetic

Two-wheeler maker Kinetic Engineering Ltd said on Wednesday it had no immediate plans to merge another two-wheeler making company in the group with itself, a move anticipated by industry.

"It has just been talked about for a long time...there really is no merger, there is no plan now," Sulajja Firodia Motwani, joint managing director of Kinetic Engineering Ltd, told Reuters on the sidelines of a news conference.

Pune-based Kinetic Engineering, owned by the Firodia family, makes mopeds, scooterettes, or small, lighter scooters and motorcycles.

Another group firm, Kinetic Motor Company Ltd makes scooters. Until two years ago, Kinetic Motor was owned 51 per cent by Japan's Honda Motor Co, the world's largest maker of two-wheeled vehicles, but the two parted ways after a dispute in 1998.

The split lead to speculation that the group would merge the two two-wheeler making companies.

"The issues are really financial in terms of ownership, control, things like those, which we have to address before we do anything....for instance, Kinetic Engineering, the holding company, has a much smaller equity than Kinetic Motor," she said.

Both companies had different shareholding patterns that would impact ownership and control after a merger, Motwani said.

"And the valuations, I think we (Kinetic Engineering) will get much better valuations when the (entire range of) bikes are launched," she said.

She was referring to at least four new motorcycle models that Kinetic Engineering will launch over the next 12 months.

Kinetic Engineering had an share capital of Rs 40.45 million and reserves of Rs 1.157 billion at the end of the last financial year ended in March while Kinetic Motor had an equity of Rs 150.83 million and reserves of Rs 508.98 million.

Tell us what you think of this report