Reva promoters look for an exit: Report

Bangalore-based Reva Electric Car Company (RECC), one of the world's most recognised electric car manufacturing companies, may see a change of ownership, with its current promoters holding talks with an international automotive investor for a sell-out.

According to VCCircle, a financial news portal, the Maini Group, AEV LLC of California and US-based investors Global Environment Fund and Draper Fisher Jurvetson are nearing a strategic sale of their stake in the company, whose valuation is believed to be around $100 million (Rs 457 crore).

The Reva is sold or test- marketed in 24 countries and has the largest deployed fleet on electric cars in the market, with over 3,000 vehicles on the road. Its business model includes vehicle design, development and manufacture, technology licensing and vehicle manufacturing.

The company entered into a collaboration agreement with General Motors India (GMI) last year to develop electric vehicles for the Indian market. GMI today said it was on course to launch the electric version of the Spark, being developed by the two companies, by the end of this year.

Mumbai-based Mahindra & Mahindra, India's largest SUV maker, had reportedly shown interest in RECC. In an email reply, a company spokesperson stated, "As a matter of company policy, we do not comment on speculation."

Despite multiple attempts, Chetan Maini, deputy chairman of RECC, remained out of reach. An email sent to the company remained unanswered at the time of going to press.

However, Maini, in a email reply to VCCirlce, stated, "As any growing company in the midst of a very exciting business landscape we are constantly evaluating opportunities that will allow us to scale, innovate and provide the best offerings to the customers. We will, however, not speculate on market rumours".

In November last year, RECC forged an agreement with Northern Lights Energy, a provider of infrastructure and services for electric vehicles, for the market of Iceland. The country was also being considered by RECC for a possible assembly plant.

Due to its high impracticality under modern day usage, the compact two-seater has failed to generate any significant demand in India. Demand suffered due its high initial cost (the car costs Rs 3-3.5 lakh in Mumbai) and low mileage.

The company is, therefore, looking at the licensing segment, like the one with General Motors, in a big way. The company will look to create kit and technology to put into other platforms that GM makes in other parts of the world.

About 50 per cent of the business for the promoters will be generated through licensed technology and licensed manufacturing. The company is currently working on the Reva NXR, which was showcased at the Frankfurt Motor Show, and follow-up models such as the sports coupe NXG.

While the NXR will be launched in the first quarter of 2011, the NXG will is available from the middle of 2012. The Reva NXR will be a four-seat, three-door hatchback for urban driving. The top speed of this car will be 104 kmph with a range of 160 km per charge. A 30,000-unit per annum plant is currently under construction in south India.