Honda Siel Cars India dissolves partnership with Usha International Limited: Complete divestment by UIL from HSCI
UIL held 3.16% shares in Honda Siel Cars India (HSCI) and had been recently expressing their desire to disinvest in a bid to branch off on their own and concentrate on their own core businesses. It was hence by mutual consent that the two parties parted way bringing to a close a 17 year old partnership. The joint venture came into existence in 1995. The company has production facilities at Greater Noida and Bhiwadi in Rajasthan. HSCI lineup includes Honda City, Accord, Jazz, Brio and the imported CR-V.
Sale was on mutual consent and consisted of 18 million shares at a cost of 100 per piece including a non compete fee. As per terms of the agreement, Siddharth Shriram ceased to be Director and Chairman of HSCI. This deal will enable the company to invest and develop its own cars in the Indian market. The Honda freedom offer is currently valid on the occasion of Independence Day accomodates Civic, Accord and CR-V slaes offers currently. Select models available for sales through Canteen Stores Department (CSD) and Central Police Canteen (CPC). Last year, Honda ended a similar joint venture with Hero Group by selling its 26% stake in the two wheeler company to its Indian partners so as to bring out their own brand of motorcycles.
Honda Siel Cars India (HSCI), leading manufacturer of premium cars in India, today announced that the two partners of the Joint Venture – Honda Motor Co., Ltd. Japan and Usha International Ltd (UIL) have signed an agreement on complete divestment by UIL from HSCI.
The two partners have been discussing the most appropriate business framework for future business expansion plans and their own priorities. UIL, which held 3.16% shares in HSCI, had shown an interest in divesting from the joint venture to be able to focus and strategically invest to expand their own core business. Therefore, based on the mutual consent, UIL has sold its shares to the partner Honda Motor Co., Japan.
Commenting on the development, Mr. Hironori Kanayama, President & CEO, HSCI, said, “We have shared a very successful and fruitful relationship with UIL over the past 17 years. I would like to take this opportunity to express my appreciation for Mr. Siddharth Shriram’s contributions to HSCI and wish UIL a bright future.”
HSCI will now be a 100% Honda subsidiary in India. The process of changing the company name and other formalities will be completed over the next few months.
USHA INTERNATIONAL LTD (USHA) SELLS ITS STAKE IN HONDA SIEL CARS INDIA LTD TO HONDA MOTOR COMPANY OF JAPAN AT A NEGOTIATED PRICE OF RS 100/- PER SHARE (INCLUSIVE OF A NON COMPETE FEE) THUS ENDING THE 16 YEARS OLD JOINT VENTURE
Usha Honda Siel Cars India Ltd and Honda Motor Company, Japan, after working together 16 years to develop Honda Siel Cars India Ltd have agreed to end their Joint Venture. Accordingly, Honda Motor Company, Japan has purchased all of the shares (18,000,000) that USHA held in Honda Siel Cars India Ltd.
USHA is pleased to have helped one of the great companies’ of the world to settle into India and to offer the best products in the world to the Indian customers.
Shriram/USHA has had a relationship with Honda Motor Company since 1985 when Honda Siel Power Products (formerly known as Shriram Honda Power Equipment Ltd) was started. As Honda Motor Company was considering manufacturing cars in India, they found the characteristics of Shriram/USHA management and ownership to be highly suitable for the partnership in automotive business even though USHA had no experience or background or direct interest in the automobile business.
To help Honda Motor Company develop their Indian business, USHA provided some of its best people to the Joint Ventures. USHA feels that it was inevitable that some day the parting would come because automobiles are not really USHA’s direct business.
The proceeds form the stake sale would be applied to the normal development of USHA’s business. According to the agreement with HM, Siddharth Shriram has ceased to be the Director and the Chairman in HSCI