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Transaction Consummation
Today, Hindustan Motors transferred its Component Business to
AVTEC, and immediately thereafter sold a part of its stake in
AVTEC to Actis and the promoter group of Hindustan Motors Ltd..
Additionally, Actis and the promoter group have invested approx.
Rs.30 cr. into AVTEC. At the valuation agreed to be paid by
Actis and the Promoter Group for acquiring AVTEC shares through
the secondary and primary purchase as above, the enterprise
valuation of AVTEC works out at Rs.423 crore. Post this,
Hindustan Motors, Actis and promoter group hold approximately
49%, 30% and 21% ownership respectively in AVTEC.
Transaction Background
In February 2005, the Board of Directors of Hindustan Motors
Ltd. (a GP - CK Birla group company) (�Hindustan Motors�) had
approved to hive off the Component Business of the Company into
its subsidiary AVTEC Limited (�AVTEC�) and invited Funds managed
by Actis Capital LLP (�Actis�) as financial partners.
The Component Business
The Component Business of Hindustan Motors comprises (a) The
Power Unit Plant (PUP) located at Indore that manufactures
engines, transmissions and their components for automobiles and
(b) The Power Products Division (PPD) located at Hosur, Tamil
Nadu that manufactures automatic transmission and their
components for off-highway heavy-duty vehicles like dumpers,
loaders and dozers as well as on-highway vehicles. The Component
Business has recorded Sales of approximately Rs.445 crore for
the financial year ending 31 March 2005.
The Components Business supplies its products to reputed global
OEMs like GM, Ford, Caterpillar and to BEML, Mitsubishi cars and
Mahindra & Mahindra in India. It also has a range of
collaborations with various global players. Assisted by its
strong R&D and engineering skills, the Components Business has
bagged critical components orders from various OEMs.
Kotak Investment Banking acted as financial advisor to Hindustan
Motors for the transaction; and Khaitan & Co. acted as the legal
advisors to Hindustan Motors. |
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