Samena Capital acquires Mahindra Two Wheelers stakes

Mahindra Two Wheelers Limited (MTWL), part of the US$ 16.7 billion Mahindra Group, and Kinetic Engineering Limited (KEL) announced on 24th February, 2014 that KEL has sold its entire equity stake in MTWL to a private equity investment group named as Samena Capital. The group keeps its major focus on Asia and the Middle East.

Kinetic Group had originally acquired the stake in November 2008, when its group company, Kinetic Motor Company Limited (KMCL), sold its two wheeler business assets to MTWL, for cash as well as a 20% equity stake. Subsequently, KMCL was merged with Kinetic Engineering Limited (KEL) in 2012, as a result the stake had been transferred to the latter.
Kinetic will receive a consideration of approximately Rs. 1821 million and after certain committed payments including NCD repayments, cost of financing etc; the net proceeds would amount to approximately Rs. 1098 million, which KEL will use for its business operations.

Commenting on the transaction, Sulajja Firodia Motwani, Vice Chairperson of Kinetic Engineering said, ““Kinetic is extremely proud of its partnership with M&M. We are certain that MTWL will grow from strength to strength to become a significant player in the two-wheeler industry. Kinetic is now focused on building its Automotive Systems business through its various group companies. We have made good progress in building a business in engine and transmission systems in KEL, motor business in Kinetic Taigene, as well as automotive electronics business in the Kinetic Ducati alliance. We are divesting our stake in MTWL, in order to invest in meeting the requirements of our Automotive Systems business in KEL. We will utilize the proceeds to meet various obligations of this business including working capital and FCCB/ debt repayment requirements to strengthen our balance sheet.”

According to Anoop Mathur, President, Two Wheeler Sector, Mahindra & Mahindra, “We are happy with our association with the Kinetic Group which enabled us to enter the two wheeler business some years ago. We welcome our new partner Samena Capital at a time when our business is growing strongly driven by rising demand for the Centuro motorcycle which has been developed based on keen consumer insights.”

"We are delighted to be partnering with Mahindra & Mahindra to help build Mahindra Two Wheelers into a leading global player,” said Ramesh Venkataraman, Senior Partner at Samena Capital. ”The early success of Centuro has demonstrated what the organisation is capable of and we look forward to an exciting and fruitful relationship in the years to come.”

Established in 2008, Samena Capital is a principal investment group focused on Asia and the Middle East.  Samena Capital’s unique model combines a diverse group of business families and entrepreneurs from across the world with experienced investment professionals based in London, Dubai, Hong Kong, Singapore and Mumbai. Ambit, led by Mr. Ashok Wadhwa, acted as the sole financial advisor to KEL for this transaction.