March 4 (Bloomberg) -- Hero Honda Motors Ltd.’s Indian founders pledged a part of their stake in the nation’s biggest motorcycle maker as they prepare to buy out partner Honda Motor Co. from the venture.
Hero Investments Pvt. pledged 10.6 million shares with IL&FS Trust Co. on March 1, according to a filing to the Bombay Stock Exchange today. The 5.3 percent stake is worth 16.3 billion rupees ($362 million) based on Hero Honda’s share price at the close of trading in Mumbai today.
India last month referred a proposal by Hero Investments to raise 45 billion rupees from overseas investors to the Cabinet Committee on Economic Affairs. Hero Group, controlled by the Munjal family, agreed to buy Honda’s 26 percent stake in the New Delhi-based company in December as the Japanese automaker works to expand business at its fully owned unit in the nation.
Ravi Sud, chief financial officer of Hero Honda, wasn’t immediately available when called on his mobile phone. Hero Group’s New Delhi-based spokesman Ashwani Sharma declined to immediately comment. A call to the office phone of Sachin Gupta, CEO of IL&FS Trust, wasn’t answered.
Hero Honda rose 2 percent to 1,536.80 rupees at the 3:30 p.m. close of trading in Mumbai. The shares have declined 23 percent this year.
Hero Investments held a 17.3 percent stake in Hero Honda as of December, according to data compiled by Bloomberg.
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