Kinetic Engg to raise Rs 100 cr; setting up new gear facility

Pune: Power train components manufacturer Kinetic Engineering is raising Rs 100 crore to fuel current and future business development, including setting up of a new facility to manufacture gear box assemblies and transmission components for Tata Motors’ small car at Singur.

An amount of Rs 30 crore is being raised through issue of compulsory convertible preference shares (CCPS) to American investment house AIG. The company also plans to float foreign currency convertible bonds (FCCBs) worth Rs 70 crore, subject to RBI approvals.

Both instruments are at a minimum price of Rs 156, a company statement said. London-based KBC Financial Products Ltd and Kotak Mahindra UK Ltd, Mumbai are the joint lead managers for the FCCB issue.

Singur plant

The amount raised via CCPS would be utilised for working capital and other requirements, while that raised via FCCBs would be used for capital expenditure requirements for executing orders for gearbox of Tata Motors’ small car and other export programmes.

Kinetic Engineering plans to set up a new gear manufacturing facility to manufacture gears and other power train components at Singur. Other programmes include manufacturing engines for Italy-based MV Augusta Motorcycles.

Earlier this year, the Kinetic Group completed its business and financial restructuring to tap auto component manufacturing opportunities.

Kinetic Engineering now focuses exclusively on component manufacture and its clients include Tata Motors, Force Motors and several international companies from Canada, the US and Europe including MV Augusta, Tomos, Carraro, Visteon, GKN Rockford and Piaggio.