In another fund-raising plan Honda Siel to raise Rs 2,100 crore

MUMBAI: Honda Siel Cars India (HSCI), the joint venture between Honda Motor Co and the Shriram family of Usha International, is undertaking another round of fund raising, this time to raise Rs 2,100 crore, two persons close to the development said.

The move by the maker of Honda City and Honda Jazz cars to raise capital will further tighten the grip of the Japanese promoter in its Indian entity.

The Japanese partner currently holds a little less than 97% stake in HSCI, thus bringing in a vice-like grip over the Indian venture. The proposed plan to raise Rs 2,100 crore comes close to the recent rights issue in November last year, when the Japanese parent of the Indian subsidiary subscribed to the Rs 1,200 rights issue, while the Indian partner stayed away from subscribing to the rights issue.

In September 2011, a month before the rights issue, the sources said that the Shriram family through Usha International had raised their stake by invoking their option to buy back shares. They did this by acquiring 2.4% stake from Honda Motor Co in Honda Siel for Rs 45 crore, to take their stake to 5%. Usha International paid Rs 52.8 a share, to Honda Motor Co.

The decision to have another round of fund raising thus raises a question whether Usha International can rustle up cash to maintain its minority stake in the joint venture.

Sources in the know say the funds are needed for setting up manufacturing lines at Tapakura in Rajasthan where it also plans to build a components and diesel engine plant. Further the company is readying to launch six new cars, including re-launches, by 2015, which will need a substantial amount of investment.

By not participating in the November rights issue, the Indian promoter's stake had declined to 3.16% from 5%.

An email query to Honda Siel on the fundraising received a cryptic response. "India is definitely among the key markets for Honda, and HSCI is committed to this market with ambitious growth plans. However, we do not have any specific information to share at this moment," the company replied.

"There are no developments. We may even keep our stake," Krishna Shriram, the scion of the Shriram family, said, when asked if Usha International, the holding firm for the family, will sell its stake.

Later Krishna Shriram elaborated his group's apprehension, perhaps for the first time. "Our concerns are the missteps in acceptable corporate governance issues in letter and spirit by HSCI. A mature acknowledgement of this is what we would seek. Valuation methodologies and cash values are secondary issues."

"We will have many partnerships in future and we do not want our reputation as exceptional partners clouded by the current proceedings," Krishna added.

In 1995, Shriram Industrial Enterprise Ltd entered into a 40:60 JV with Honda Motor Company to form HSCI. In order to meet the group's expansion plan, Siddharth Shriram later sold 38% stake in HSCI, with an option of buyback. With Indian subsidiary getting further capitalised by the parent to meet the expansion plans, Siel's right to buyback almost halved.Automobile News

Coma after drunk driver rams the auto of National Award winning animator of Ra.One, goes in coma

Charu Khandal, the 28 year old who led the team of animators involved with Shah Rukh Khan's Ra.One, is at present in a coma after the auto rickshaw she was commuting in was hit was by a Honda City. Blood test of the driver of the car, Manoj Netrapal alias Gautama, showed that he was in inebriated state when he rammed his vehicle into Khandal's auto. He was booked for rash and negligent driving, though he is already out on bail.
Khandal was returning to her home with her sister Ritu and friend Vikrant Goel at 1 am in Oshiwara, Mumbai when the accident occurred. She had hosted a party for close associates to commemorate her success on Saturday, as she had been awarded the prestigious National Award for Special Effects for the movie Ra.One. All three victims of the accident were admitted to a private hospital immediately after sustaining grievous injuries. While her sister escaped the incident with minor injuries, Goel was severely injured and was kept under medical observation.
The noted animator suffered critical injuries in the head, along with multiple fractures on the leg and spine and her condition is said to be quite serious. According to doctors, Khandal, who is already fighting for her life, will remain permanently handicapped if she gets through this unfortunate stage. Reportedly, swelling in the victim's spinal cord was not allowing doctors to carry out the requisite surgery.
Everyone in Bollywood is concerned about her situation; the director of Ra.One Anubhav Sinha expressed grief over the incident.Automobile News