Hero Honda promoter pledges further stake

PTI New Delhi | Updated on March 16, 2011

Promoter of Hero Honda, Hero Investments Private Ltd, has pledged further shares of the company to IL&FS Trust Company Ltd, raising an estimated Rs 200 crore.

In a filing to the Bombay Stock Exchange, Hero Honda said HIPL has pledged an additional 13,18,653 shares aggregating 0.66 per cent stake in the company on March 7.

On the basis of the closing price of the company’s shares on the BSE on March 7, the value of the pledge stake is around Rs 200 crore.

With the transaction, IL&FS Trust Company has now increased its stake in the two-wheeler maker to 5.98 per cent from 5.32 per cent before. In the first week of this month, HIPL raised an estimated Rs 1,585 crore by pledging 5.32 per cent stake with IL&FS Trust Co.

On March 9, the company also raised Rs 900 crore by pledging shares to Axis Trustee Services Ltd.

HIPL is one of the main shareholders of Hero Honda, holding 17.33 per cent stake in the company as on December 31, 2010.

The BM Munjal led Hero Group is raising funds to finance the buyout of Honda’s 26 per cent stake in Hero Honda for Rs 3,841.83 crore.

The group also said it will raise funds from private equity firms, including Bain Capital and Lathe Investment, estimated to be around Rs 4,500 crore to finance its buyout by selling stake in Hero Investments Private Ltd.

It has already sought government clearance to bring in foreign investment of up to Rs 4,500 crore in HIPL.

Meanwhile, the shares of Hero Honda were trading today at Rs 1,514.20 in the late afternoon trade on the BSE, down 0.43 per cent from the previous close.

Published on March 16, 2011

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