India’s leading manufacturer of two wheelers Hero MotoCorp
Ltd (HMCL) has announced that the US based company Erik Buell Racing in which
it had invested US $ 25 million (Rs 156 crore by today’s exchange rate) has
ceased to exist with effect from April 16, 2015. HMCL had invested this amount through
its own subsidiary incorporated in 2013 in the United States in Delaware by the
name of HMCL (NA) for a 49pc equity stake in the US based company. According to
unconfirmed reports, on April 15, 2015, Erik Buell Racing filed for bankruptcy
protection and ceased all operations including closing down their website.
This is a major setback to Hero MotoCorp which was hoping to
enter the high-end motorcycles segment through EBR.
Hero MotoCorp had announced this strategic partnership early
2012 wherein it had stated that HMCL would receive support in terms of
cutting-edge technology and design to develop future models with EBR, a company
that specialised in designing and manufacturing powerful and high-speed
Through this alliance HMCL was also hoping for the first
time to enter the world of international motorcycle racing. The company was to
make a foray into the racing arena by sponsoring two teams Team Hero and AMSOIL
Hero at the AMA Pro Racing National Guard Superbikes Championship on the EBR
1190RS bikes. EBR 1190RS was the flagship bike from EBR.
Hero MotoCorp Ltd informed the Bombay Stock Exchange that HMCL
had invested US Dollars 25 (twenty five) million in Erik Buell Racing, Inc., a
Delaware corporation, through a wholly owned subsidiary in Delaware, U.S.A. by
the name of HMCL (NA), Inc. EBR has a wholly owned subsidiary, Erik Buell
Racing LLC, a limited liability Company organized in Wisconsin
("Subsidiary"). On April 16, 2015 the Board of Directors of EBR has
passed a resolution for an Assignment for the Benefit of Creditors under
Chapter 128 of the Wisconsin Statutes for itself and the Subsidiary (in its
capacity as the sole member and manager of the Subsidiary) and to direct the
proposed assignee or his counsel, to file such assignment in the Court for the
County of Walworth, State of Wisconsin. EBR and Subsidiary will also be ceasing
their operations with effect from April 16, 2015.
Erik Buell Racing was the successor to a company Buell
Motorcycle Co once owned by Harley-Davidson Inc.
Apart from EBR, Hero MotoCorp has strategic alliances with Engines
Engineering and Magneti Marelli -both based at Bologna, Italy, as well as AVL
of Austria. Engines Engineering is a technology partner of Hero MotoCorp while
the latter has a joint-venture with Magneti Marelli in India for developing
fuel injection technologies. Though AVL , the Indian two wheeler manufacturer
is able to build its internal capabilities for engine development.