Hero-PE deal: HIPL to hold 34% stake in Hero Honda

A bunch of six private equity players (PEs) have signed MoU with Hero investments and  the deal worth Rs 4,250 crore is likely to have 8 year lock-in period, reports CNBC-TV18 quoting sources.

Hero has an option to buyback PEs at 15% discount to Hero Honda Motors Ltd's (HHML) current market price.

Sources also mention that Hero Investments Pvt Ltd (HIPL) will hold nearly 34% equity stake in Hero Honda, while other players like KKR and Carlyle Group will hold 7.5%, Warburg Pincus and TPG 6% and GIC and Bain Capital will hold 9% each in HIPL.

Hero Investments holds around 17% stake in Hero Honda. The company also has investment in couple of other portfolio companies as well. Sources say that after the deal is completed, Hero Investments will seize to own investments in any kind of other portfolio companies.