Hero MotoCorp to merge Hero Investment with itself

The country's largest two-wheeler maker Hero MotoCorp today said it plans to merge a promoter group firm Hero Investment with itself and the board will take up the proposal its meeting next week.

The move comes 10 days after the Brij Mohan Lall Munjal-led Hero Group undertook a restructuring of family shareholding in two Hero MotoCorp Ltd (HMCL) promoter firms Hero Investment Pvt Ltd (HIPL) and Bahadur Chand Investments Pvt Ltd (BCIPL).

"A meeting of the board of directors of the company will be held on June 04, 2012, inter alia, to consider and approve the proposal of amalgamation of HIPL with HMCL," Hero MotoCorp said in a filing to the BSE.

During the scheduled meeting, the board will also consider the scheme of amalgamation, the valuation report and other matters incidental and connected to the said proposal, it added.

Shares of Hero MotoCorp today closed at Rs 1,821.90 on the BSE, down 0.82% from their previous close.

Earlier on May 21, Hero MotoCorp had said BML Munjal's wife Santosh and his second son Suman will transfer their shares in HIPL and BCIPL to other sons, Pawan and Sunil.

All the family members are partners of the firm Brij Mohan Lall Om Prakash (BMOP). Both these two transactions in HIPL and BCIPL will take place "on or about June 5, 2012".

Post this transfer, Pawan and Sunil will hold 33.21% stake each, while Suman will own 33.20% stake on behalf of BMOP in BCIPL. Besides, Suman holds 0.38% on his personal capacity.

HIPL and BCIPL will continue to hold 43.33% and 8.67% stake in Hero MotoCorp. There will be no change in the shareholding of the two-wheeler maker.

The share transfer exercise comes two years after the Munjal family had announced a family settlement agreement, following which their 26% stake in erstwhile Hero Honda was consolidated in the name of Suman.

He had acquired the stake held by his cousin Vijay Kumar Munjal and uncle Satyanand Munjal in HIPL and BCIPL under a family-settlement pact.

Brij Mohan Lall Munjal had five children. The eldest son Raman has expired. Suman is his second son. His third son Pawan is the Managing Director and CEO, while fourth son Sunil is the Joint Managing Director of Hero MotoCorp. The youngest is daughter, Geeta Munjal.