Kinetic Motor, Kinetic Engineering decide to merge

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Kinetic Motor, Kinetic Engineering decide to merge

In the board meeting held by Kinetic Motor today, both the companies Kinetic Motor and Kinetic Engineering decided to merge. The company said that this group move is aimed at creating synergy and enhancing shareholder value. CNBC-TV18’s Swati Khandelwal Jain reports this exclusive news.

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Excerpts from Reporter's Diary on CNBC-TV18 Watch the full show » Kinetic Motor BSE | NSE 31/05/12 Are Mutual Funds betting on Kinetic Motor? Other Stocks in this news Kinetic Engineering |

In the board meeting held by Kinetic Motor today, both the companies Kinetic Motor and Kinetic Engineering  decided to merge. The company said that this group move is aimed at creating synergy and enhancing shareholder value. CNBC-TV18's Swati Khandelwal Jain reports this exclusive news.

Post the merger, the promoters holding which is at 57.49% will come down to 52.85%. It was also understood that the balance shareholding will be between public and financial institutions.

Sulajja Firodia Motwani will be appointed as the Vice-Chairperson for the new entity Kinetic Engineering Limited (KEL). The board had also given a nod for seeking approval from RBI for extending the FCCBs by at least a year.

KEL had issued FCCBs worth Rs 80 crore (USD 18 million) sometime back. Now, they have asked whether it could be redeemed or converted at least from February 2013 to February 2014.

Interestingly in the last quarter, Kinetic Engineering had seen losses to the tune of Rs 7 crore versus Rs 2 crore in the same period last year.

When asked Sulajja Firodia Motwani, she said, "Kinetic Engineering Automotive System business has been growing steadily step by step. The losses in the last quarter were primarily because of a large write-off on account of the exchange rate movements as KEL has an FCCB outstanding."

Firodia also feels the company's performance is improving step by step. She mentioned that the company has reduced its liabilities. "The long-term debt has reduced from Rs 100 crore to almost Rs 20 crore and the order book is quite good." She added.

As far as the order backlog is concerned, the company has quite a few orders like Mahindra Navistar and the Nano project. They are quite bullish that they will be able to become profitable by 2013.

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