Hero MotoCorp to absorb investment arm

Hero MotoCorp, India's largest two-wheeler vehicle manufacturer, has approved a proposal to merge the investment arm of its parent into the auto maker, the company said in a statement on Monday.

Private equity funds Bain Capital will hold 8.58 per cent and the Government of Singapore Investment Corp (GIC) will own 3.71 per cent in the auto maker through wholly-owned Indian units after the merger, the company said.

The private equity firms' investments in Hero Investments, a promoter-controlled holding company, were used to help repay debt from the $851 million purchase of former partner Honda Motor's 26 per cent stake in the automaker in March 2011.

Copyright: Thomson Reuters 2012