Hero MotoCorp enters into a 'settlement agreement' to acquire Erik Buell Racing's consulting assets
Erik Buell Racing recently filed for bankruptcy protection. The filing was under a clause for a company looking for a way to find its feet again rather than close operations. Hero MotoCorp (HMCL NA and HMCL Americas, to be precise), which until now had a 49.2 per cent stake in the American sport motorcycle manufacturing outfit, has now stepped in with a 'settlement agreement' for $2.8 million that allows Hero to acquire some of EBR's tangible and intangible assets.
The settlement agreement is still pending approval from the Circuit Court in Wisconsin, USA and the board of directors of Hero MotoCorp until August 10, 2015. Upon approval, Hero MotoCorp's R&D teams will be able to influence and spur some of the consulting projects that EBR was executing at the time of filing for bankruptcy.
This development should help Hero gain more access to EBR's technical know-how. The upcoming Hero HX 250R is reportedly a result of the technical collaboration with EBR. The new Hero Karizma ZMR, in fact, has a similar rear end design as the EBR 1190 RX.
| Mumbai, July 28, 2015: HMCL NA, Inc. and HMCL Americas, Inc. (both wholly owned subsidiaries of Hero MotoCorp Ltd.) have entered into a "Settlement Agreement" with the "Receiver" appointed by the Circuit Court , Wisconsin, U.S.A. in the matter of Chapter 128 Receivership filed by the Erik Buell Racing, Inc. and Erik Buell LLC ("EBR"). As per the Settlement Agreement, HMCL Americas Inc. has agreed to acquire the ownership of certain tangible and intangible assets of EBR free and clear of all encumbrances, for a consideration of US$ 2.8 million. HMCL and the Receiver have also agreed to resolve all disputes and fully give mutual releases in terms of the Settlement Agreement for all subject matters which is in any way related to 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, authorizing 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. | |