The Hindu Business Line : Taiwan co picks up 11 pc stake in Kinetic Motor

Ms Sulajja Firodia Motwani, Joint Managing Director, KEL and Director, KMCL, said the agreement with SYM would not clash with the tie-up with Italjet.

Mumbai , Jan. 10

SANYANG Industry Co Ltd (SYM), Taiwan, would be acquiring a minority equity stake in Kinetic Motor Company Ltd (KMCL), through a preferential allotment of shares.

According to an official statement, the board of Kinetic Motor has recommended issuing 20.65 lakh shares priced at Rs 66 each (worth Rs 13.63 crore), giving SYM an 11.1-per cent equity stake.

"Kinetic has also entered into a technical collaboration with SYM for technology and manufacturing their models in India," the statement said.

SYM, having its own research and development, has produced models in the 50cc-500cc range including electric scooters and fuel injection technology vehicles. Its Web site showed a product line-up dominated by scooters.

Founded in 1954, SYM had become in the early 60s Taiwan's first motorcycle manufacturer, producing vehicles with Honda's assistance. Later, as the island country's motoring economy grew, it also rolled out Honda cars. At present, it boasts a turnover in excess of $1 billion, making more than six lakh "motorcycles" and 20,000 automobiles per annum.

Following the SYM deal, the promoter's stake in KMCL would be approximately 57 per cent.

KMCL had disclosed plans several months back to manufacture and sell scooters from Italjet. When contacted, Ms Sulajja Firodia Motwani, Joint Managing Director, KEL and Director, KMCL, said the agreement with SYM would not clash with the tie-up with Italjet.

Both companies brought to Kinetic distinct product lines. Italjet showcased European design while SYM had proven capabilities in technology. The first Italjet scooter from Kinetic would be commercially available in the next few weeks and the second one by June.

Technology for the first product in league with SYM would be in place within a year. According to her, KEL would benefit from the SYM tie-up as it gets to supply components for the partnership.

Given Reliance Capital's equity holding in KEL and SYM's stake in KMCL, the once hinted plans to merge the two Kinetic Group companies would not be pursued. "There are no plans to merge," Ms Motwani said.

KEL would also continue its collaboration with South Korea's Hyosung for motorcycles, she said when asked of the likelihood of bringing vehicle manufacturing under KMCL with KEL being an auto components player.

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