Munjals reach settlement; shares change hands

Hero Honda said Suman Kant Munjal will acquire 26 per cent stake in the company through two investment companies — Hero Investments Private Ltd (HIPL) and Bahadur Chand Investments Pvt Ltd (BCIPL) through inter se transfer (among promoters). Hero Honda Motors is a joint venture between the Hero Group and Honda of Japan which holds 26 per cent.

As per the agreement, Suman will acquire the stake held by his cousin Vijay Kumar Munjal and uncle Satyanand Munjal in HIPL and BCIPL.

Transfer of shares
“As part of an ongoing family settlement arrangement, within the Hero Group, the HIPL and Suman Kant Munjal have informed the stock exchanges ...about the proposed transfer of shares amongst the promoters,” the Hero Group said in a statement. The intended transfer of shares will in no way impact the working of any of the entities in the Hero Group, it added.

As per the BSE filing, HIPL will acquire 8.67 per cent stake (1.73 crore shares) held by Hero Cycles Ltd in Hero Honda through a share transfer among promoters (inter se) at a price of Rs 0.8 per share, aggregating Rs 1.38 crore. It will increase HIPL’s holding in Hero Honda to 17.33 per cent.

Subsequently, Suman will acquire HIPL’s holding and that of BCIPL’s 8.67 per cent stake in Hero Honda through another inter se transfer taking his overall holding in the two- wheeler maker to 26 per cent. The date of proposed acquisition is on or before May 26.
“The proposed acquisition is an indirect acquisition of shareholding/voting rights in the target company by Suman Kant Munjal,” the filing said.

Family agreement
As part of the family agreement, Vijay and Satyanand will transfer their 18,000 and 4,800 shares in HIPL, comprising 75 per cent and 20 per cent holding respectively, to Suman.
All the three persons are partners of the firm Brij Mohan Lall Om Prakash (BMOP) and after the transfers, Suman will hold 95 per cent stake in HIPL on behalf of BMOP. Similarly, Vijay and Satyanand have transferred 10,400 and 2,400 shares, comprising 80 per cent and 18.46 per cent holding respectively, of BMOP in BCIPL to Suman. On behalf of BMOP, the acquirer will eventually hold 98.46 per cent in BCIPL.

Hero Group Chairman Brij Mohan Lall Munjal has five children. His eldest son Raman expired, his third son Pawan is the Managing Director and CEO of Hero Honda. The fourth son Sunil looks after Hero Corporate Services. The youngest of his children is daughter Geeta.

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