Munjals buyout of Honda stake for $1 bln

Dec 14, 2010 |

Reuters

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Mumbai: The owner of Hero Group is set to buy Honda Motor's 26 per cent stake in joint venture Hero Honda for about $1 billion or half the current market value, the Economic Times reported on Tuesday.

The deal, likely to be announced before Christmas, will see the Munjal family buying Honda's stake through a special purpose vehicle (SPV) by raising a bridge loan, the newspaper said, citing persons familiar with the development.

Hero Honda is India's largest motorcycle manufacturer.

The Munjals will divest 60-70 per cent stake in this SPV to a group of two to three private equity firms to pay back the loan, the paper said, adding Carlyle, Kohlberg Kravis Roberts & Co, TPG, Bain Capital and Warburg Pincus were in the fray.

Officials at the Hero Group, Honda Motor, and the private equity firms could not immediately be reached by Reuters for comment.

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