Business Daily from THE HINDU group of publications
Tuesday, Jul 11, 2006
Business Daily from THE HINDU group of publications Tuesday, Jul 11, 2006 |
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Corporate
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Restructuring Transfer of Royal Enfield unit: Eicher gets board nod Our Bureau
New Delhi , July 10 Commercial vehicle manufacturer, Eicher Motors Ltd on Monday said it would transfer its Royal Enfield business unit to a new subsidiary company proposed to be set up in the National Capital Region. At the meeting held today, the board approved transferring the motorcycle division by way of a slump sale and on a going concern basis to the new company proposed to be incorporated as a subsidiary of Eicher Motors, subject to the shareholders approval. The company also said that it would look for strategic and financial investors in the subsidiary company to exploit the growth potential of the Royal Enfield business. Speaking to Business Line, Mr S. Sandilya, Chairman, Eicher Motors, said that the new subsidiary being formed is fully owned by Eicher. He added that the company was looking at options to rope in a strategic investor in the subsidiary. Mr Sandilya, however, denied the likelihood of a management buy-out (MBO) at the firm. There has been considerable speculation in the market of a possible MBO at Royal Enfield led by the bike company's CEO, Mr R.L. Ravichandran. This would be the third round of restructuring for the Eicher Group after it first merged group companies, Eicher Ltd and Eicher Motor Ltd, and then hived off the tractor division to Tractors and Farm Equipment Ltd.
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