The Board of Directors of Hero Corporate Services has reportedly given a green light to the exit of Honda Motor Corp. from Hero Honda Motor Ltd.
Hero Honda Board is likely to meet on Thursday to approve the proposed exit of its Japanese joint venture partner Honda Motor Corp.
Hero Corp. is likely to acquire Honda's 26% stake in Hero Honda for US$1-1.2bn.
The Hero group is likely to pay a royalty of Rs 23-24bn to Honda over the next 3-4 years for technology transfer.
According to some media reports, officials from Honda Motor Corp. could soon visit India to finalise the deal.
The proposed deal between the Hero group and the private equity players will be sealed once the first phase of the transaction - Honda's exit - is completed.
KKR, Warburg Pincus, Bain Capital, Apax Partners, Blackstone and Carlycle are among the top PE firms of the world in race to pick up a stake in the SPV that will be floated by the Hero group once they acquire Honda's 26% stake in Hero Honda.
The Hero Corporate Services Board approved the royalty to be paid to Honda over the next 3-4 years.
The Board has also asked Hero Honda to put a margin protection plan in place in the face of the increase in royalty payment to the Japanese auto major.