Hero MotoCorp Ltd (HMCL) has filed paperwork with the Bombay Stock Exchange stating that its wholly-owned subsidiary, HMCL Americas, has entered into a settlement agreement with Erik Buell Racing, which sees the American arm of the Indian brand acquire “certain consulting project” from EBR for $2.8 million.
The filing with the Bombay Stock Exchange reads: “”As part of the settlement agreement, HMCL Americas Inc has agreed to acquire the ownership of certain tangible and intangible assets of EBR Entities, free and clear of all encumbrances, for a consideration of USD 2.8 million.”
The move is not surprising, since the projects and research in question are unfinished consulting work Erik Buell Racing was doing for Hero MotoCorp as a client.
Considering that EBR had unfinished work for Hero MotoCorp, the Indian company is also likely one of the creditors that EBR owes money to, and for whom the Chapter 128 receivership proceedings are intended to make whole.
According to the stock exchange filings, HMCL agrees to drop all other claims against EBR in exchange for these tangible and intangible assets.
This scenario is very different from the doom and gloom situation that many Buellistas feared, where Hero MotoCorp “let EBR fail” so it could acquire the company for pennies on the dollar.
It is also very different from the rumors that have been circulating the internet for the past five days or so, where EBR would be bought by HMCL, Erik Buell would join the new company, and they would return to WSBK racing.
This deal with Hero MotoCorp is subject to the Circuit Court’s approval, of course, though it is likely to be granted. Also, the auction for the rest of EBR’s assets has been re-scheduled for next week.
Source: Bombay Stock Exchage