HMCL declines after HMCL Americas enters into settlement agreement to acquire EBR's consulting assets

Hero MotoCorp declined 2.93% to Rs 2,529.35 at 15:25 IST on BSE after the company said HMCL Americas Inc., entered into settlement agreement to acquire EBR's consulting assets.

The announcement was made during market hours today, 28 July 2015.

Meanwhile, the S&P BSE Sensex was down 119.62 points or 0.43% at 27,441.76.

On BSE, so far 34,171 shares were traded in the counter as against average daily volume of 29,054 shares in the past one quarter.

The stock hit a high of Rs 2,629 and a low of Rs 2,519 so far during the day. The stock had hit a record high of Rs 3,271.80 on 1 December 2014. The stock had hit a 52-week low of Rs 2,252 on 8 May 2015.

The stock had outperformed the market over the past one month till 27 July 2015, rising 2.3% compared with Sensex's 0.9% decline. The scrip had also outperformed the market in past one quarter, rising 12.12% as against Sensex's 1.41% gain.

The large-cap motorcycle maker has equity capital of Rs 39.94 crore. Face value per share is Rs 2.

Hero MotoCorp said that HMCL NA, Inc. and HMCL Americas, Inc. (both wholly owned subsidiaries of Hero MotoCorp) have entered into a settlement agreement with the receiver appointed by the Circuit Court, Wisconsin, USA in the matter of Chapter 128 Receivership filed by the Erik Buell Racing, Inc. and Erik Buell LLC (EBR). As per the settlement agreement, HMCL Americas Inc. has agreed to acquire the ownership of certain tangible and intangible assets of EBR free and clear of all encumbrances, for a consideration of $2.8 million. HMCL and the receiver have also agreed to resolve all disputes and fully give mutual releases in terms of the settlement agreement for all subject matters which is in any way related to EBR.

The settlement agreement is, inter cilia, contingent upon the approval by the Circuit Court; and the approval of the board of directors of Hero MotoCorp, authorizing its joinder as a direct party to the Settlement Agreement on or before 10 August 2015. The performance of the settlement agreement will help Hero MotoCorp's in-house research and development teams to accelerate development of certain consulting projects, including the projects EBR was executing for the company at the time of filing of the Chapter 128 Receivership.

EBR Inc., in which MotoCorp has an equity investment, and EBR Inc.'s subsidiary EBR LLC had ceased their operations with effect from 15 April 2015 and had filed for the Chapter 128 Receivership before the Circuit Court. The notice of motion with regards to the settlement agreement will be filed in the Circuit Court in the next few days, Hero MotoCorp said.

Hero MotoCorp's net profit fell 14.1% to Rs 476.53 crore on 3.8% rise in total income to Rs 6886.75 crore in Q4 March 2015 over Q4 March 2014.

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