Honda to hike stake in Indian joint venture

TOKYO, July 7: Honda Motor Co Ltd said on Monday it would spend about Rs 62 crore ($ 17.3 million) for a majority stake in its Indian joint venture Shriram Honda Power Equipment Ltd (SHPE).

Honda currently has a 33.33 per cent stake in SHPE and the purchase of an additional 23.33 per cent from its Indian partner Shriram Industrial Enterprises Ltd (SIEL) will boost its stake to 56.66 percent, a Honda spokesman said.As a result of the sale, SIEL’s stake in the joint venture will fall to 10 per cent he noted. Local investors hold the remaining shares in the venture, the spokesman said.SHPE, which produces power generators and general-purpose engines and pumps, has a production capacity of 120,000 power generators a year, the spokesman said, adding that if has about 60 per cent of the Indian power generator market.The company will produce an estimated 90,000 power generators in calendar 1997, he added.