After infusing around US $ 25
million in Erik Buell Racing in 2013, a company which later filed for bankruptcy, India based Hero MotoCorp Ltd (HMCL ) now seems
to have entered a new chapter with this US based company. The wholly owned subsidiaries of HMCL ---
HMCL NA, Inc. and HMCL Americas, Inc.----as per a “Settlement Agreement,” have agreed
that HMCL Americas Inc. will acquire the ownership of certain tangible and
intangible assets of EBR free and clear of all encumbrances, for a
consideration of US$ 2.8 million (Rs 17.9 crore approx.).
HMCL had earlier through its
own subsidiary incorporated in 2013 in the United States in Delaware by the
name of HMCL (NA) invested US $ 25 million (Rs 156 crore approx.) for a 49pc equity
stake in the US based company Erik Buell Racing. But with effect from April 16,
2015 Erik Buell had ceased to exist. Erik Buell Racing filed for bankruptcy
protection and ceased all operations including closing down their website.
Now, according to an HMCL
press release, its subsidiaries have entered into a “Settlement Agreement” with
the “Receiver” appointed by the Circuit Court , Wisconsin, U.S.A. in the matter
of Chapter 128 Receivership filed by the
Erik Buell Racing, Inc. and Erik Buell LLC (“EBR”).
The Settlement Agreement is,
inter alia, contingent upon the approval by the Circuit Court; and the approval
of the board of directors of Hero MotoCorp, authorising its joinder as a direct
party to the Settlement Agreement on or before August 10, 2015. The performance of the Settlement Agreement
will help Hero MotoCorp’s in-house research and development teams to accelerate
development of certain consulting projects, including the projects EBR was
executing for the Company at the time of filing of the Chapter 128
Receivership. EBR Inc., in which the
Company has an equity investment, and EBR Inc.’s subsidiary EBR LLC had ceased their operations with effect
from April 15, 2015 and had filed for the
Chapter 128 Receivership before the Circuit Court. The notice of motion
with regards to the Settlement Agreement will be filed in the Circuit Court in
the next few days, the release added.
The bankruptcy of Erik Buell
Racing was 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 motorcycles.
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.
Source: Hero MotoCorp / Motown India
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