New Delhi, Oct 15 (UNI) Kinetic Engineering Ltd (KEL) will raise Rs 80 crore in mezzanine capital of which Rs 60 crore will be predominantly used to fund its new assembly facility in Singur and the remaining to meet its capital expenditure.
''We will raise Rs 80 crore mezzanine capital of which majority will be used in the gear box and transmission facility for Tata's small car coming up in Singur,'' Kinetic Motor Company Ltd Managing Director Sulajja Firodia Motwani told reporters here today.
The new facility in Singur will have a production capacity of 1.75 gear box units and will be the second unit for the company after its existing Rs 300 crore turnover plant in Ahmednagar.
Kinetic has recently completed a comprehensive financial and business restructuring of its auto component business aimed at tapping the auto component business expected to be worth 33-40 billion dollars by 2015.
KEL will focus exclsively on auto-component manufacturing and all two-wheeler manufacturing will be governed by Kinetic Motor Company Ltd (KMCL).
Kinetic Engineering's investments by Reliance Capital (Purchase of 7,15,000 warrants) and Clearwater Capital Partner (Purchase of 7,00,000 warrants) apart from transfer of the two-wheeler activities to KMCL.
KEL will now focus on products like small engines up to 500 cc ideal for two-wheelers and recreational products such as ATVs or jet-skies, complete gearboxes for automobiles, earth moving equipment, and commercial vehicles.
Unlike KMCL, the restructuring has worked well for KEL as it is a profit making company while KMCL still continues to be in red and is banking on its new scooter to help it scale-up.