Going it alone
New Delhi, Aug. 10: Siddharth Shriram-led Usha International has sold its entire stake in Honda Siel Cars India (HSCI) to Japanese joint venture partner Honda Motor for Rs 180 crore.
Usha International has sold 18 million shares at a “negotiated price” of Rs 100 apiece, including a non-compete fee.
Honda Siel was incorporated in December 1995 with the Japanese partner being the majority shareholder.
“Usha International, which held 3.16 per cent in HSCI, had shown interest in divesting from the joint venture to be able to focus and strategically invest to expand its own core business,” Honda Siel said in a statement.
HSCI will now be a 100 per cent Honda subsidiary in India. The process of changing the company name and other formalities will be completed over the next few months.
Usha International said its chairman Siddharth Shriram had stepped down from Honda Siel’s board, which he also chaired.
“We have shared a very successful and fruitful relationship with Usha International over the past 17 years. I would like to take this opportunity to express my appreciation for Siddharth Shriram’s contributions to HSCI and wish it a bright future,” said Hironori Kanayama, president and chief executive officer of HSCI.
Analysts said Usha International has been looking to sell out since October 2011 after Honda Motor initiated an equity capital-raising programme of Rs 3,200 crore to finance its plans for new models and a diesel engine plant. Since 1995, about Rs 3,000 crore has been invested in Honda Siel, majority of which came from the Japanese parent.
This is the second partnership Honda has ended in India in as many years.
In 2010, the auto maker sold its entire 26 per cent stake in India’s largest two-wheeler maker — then called Hero Honda and now renamed Hero MotoCorp — to the Hero group to focus on its fully owned two-wheeler unit, Honda Motorcycle and Scooter India Ltd.
Honda Siel manufactures hatchbacks the Brio and the Jazz as well as sedans the City, the Civic and the Accord at its Greater Noida factory. It also imports sports utility vehicle, CR-V.