New Delhi: The country's largest two-wheeler maker Hero MotoCorp Monday said it has picked up 49.2 percent stake in US-based Erik Buell Racing (EBR) for USD 25 million (about Rs 148 crore).
The company has incorporated a wholly-owned subsidiary in the US by the name of HMCL (NA), Inc for the purposes of investing in Erik Buell Racing, Inc, Hero MotoCorp (HMC) said in a filing to the BSE.
"HMCL(NA) has agreed to invest USD 25 million in EBR for a total stake of 49.2 percent in the share capital of EBR. The first tranche of USD 15 million has been invested by HMCL (NA) on June 28, 2013," it added.
The second tranche of USD 10 million is proposed to be invested within the next nine months, the company added.
Last year Hero MotoCorp had entered into technology sourcing pact with EBR as it looks to strengthen presence in the high-end bike segment.
The development is a part of the Indian firm's strategy to enhance technological prowess, post the break up of the erstwhile joint venture with Honda -- Hero Honda.
The idea behind entering into partnership with EBR was a part of HMC's overall strategy to have multiple technology source for different segments and enhance its own R&D capability.
In December 2010, the Hero Group and Honda had agreed to end their 26-year-old relationship, with the Indian partner agreeing to buy out Honda's 26 per cent stake in Hero Honda for Rs 3,841.83 crore.
The two erstwhile partners had, however, signed a new licensing agreement under which Hero will pay Honda 45 billion yen(about Rs 2,450 crore) till 2014.
Shares of HMC were trading at Rs 1,677.55 on the BSE in morning trade, up 0.92 percent from their previous close.
First Published: Monday, July 1, 2013, 10:50