Reliance Cap to buy 14.8% in Kinetic Engg

Reliance Capital Private Equity is set to acquire a 14.81 per cent stake in the Firodia family-controlled Kinetic Engineering Ltd for Rs 12.7 crore (Rs 127 million).

The board of KEL on Monday approved the proposed sale of stake in the company.

Reliance Capital Private Equity, a division of Reliance Capital, will subscribe to 715,000 shares in Kinetic Engineering on a preferential basis at Rs 178 per share.

In addition, Reliance Capital will subscribe to 600,000 equity warrants of KEL, each convertible into one equity share, at a price of Rs 178 per equity share. KEL's stock closed at Rs 184.35 on the Bombay Stock Exchange on Monday.

A KEL release said MicroAge Instruments Pvt Ltd, a promoter group  controlled by the Firodia family, will also subscribe to 900,000 equity warrants of Kinetic Engineering, each convertible into one equity share at a price of Rs 178 per share.

Reliance Capital will also subscribe to 1,50,00,000 preference shares of Kinetic Engineering aggregating to an investment of Rs 15 crore (Rs 150 million).

The issue of shares is subject to the approval of shareholders of Kinetic Engineering.

Sulajja Firodia Motwani, joint managing director, Kinetic Engineering said, "The investment is aimed at enhancing our focus on manufacturing of automotive components for Indian and global automotive companies."

Ambit Corporate Finance Pte Ltd acted as the exclusive financial advisor to this transaction. Ambit Corporate Finance will also subscribe to 100,000 equity warrants of Kinetic Engineering, each convertible into one equity share at a price of Rs 178 per share.

Ambit will also subscribe to 50,500 equity shares at a price of Rs 178 per share on preferential basis.