Kinetic, Pune’s pioneering group in the area of automobiles and automotive technology, today announced the completion of its restructuring plan thereby bringing synergies across its various businesses and divisions, aimed at improving shareholder value and aligning its business to meet dynamic market demands.
Speaking on the developments, Ms. Sulajja Firodia Motwani, Vice Chairperson Kinetic Engineering Ltd, said, “We are pleased to announce the culmination of the initiatives undertaken that aims at streamlining our business and aids in executing our strategic plan that will focus upon the enormous opportunities prevailing in Indian and global market place. Innovation, leveraging synergizes; acceleration of profitable growth and increasing shareholder value has been the company’s primary objective”.
Effective 13th February 2013, the company through a communication to the Stock Exchanges (BSE& NSE) announced the completion of the merger of Kinetic Motor Company Limited (KMCL) and Kinetic Engineering Limited (KEL) under one entity in accordance to the provisions of under Sections 391 to 394 of the Companies Act. Honourable Bombay High Court in its final hearing held on 8th February, 2013 has approved the said Merger of KMCL with KEL and final High Court Order will be received within 15 days. As a result of the merger, the stake of the Promoters in Kinetic Engineering would stand at 53%, from a current stake of 57%. The balance shareholding will be held by public and financial institutions. Pursuant to the merger, the investment of 6,12,000,00 shares of Rs. 10/- each in Mahindra Two Wheelers Limited will be directly held by the KEL , valued at a face value of around Rs 61 Crores.
The amalgamation intends to consolidate synergies including enhanced financial strength and flexibility leading to strengthening and alignment of various stakeholders’ interest, reduction of cost and value creation for the stakeholders. Further, the merger culminates the restructuring activity undertaken by the Kinetic group to streamline its manufacturing and engineering entities towards a focused player in the Automotive Systems and Components business with Powertrain systems as its focal point.
KEL also announced the extension of its conversion /redemption of US$ 18 million FCCB till February 2014 which received Reserve Bank of India (RBI) approval within a YTM of 5.83% set as per Mid Swap ratio benchmark. KEL had approached its bondholders, who also consented to the restructuring by extending the tenure of the FCCBS by a 100% votes cast in favour of the restructuring through Clearstream voting system.
Restructuring envisages extention of the tenure for conversion/redemption by an year and without the change in conversion price as was fixed @ Rs 156/- per share at the time of issue of FCCBs. Current market price of the KEL scrip is also around Rs. 120. KEL further announced the appointment of Mr. Harjit Bhatia as an additional director on the Board of Directors of the Company, replacing Mr. Santosh Senapati.