New Delhi, Aug 10 (IANS) Diversified group Usha International has sold its stake in Honda Siel Cars India (HSCI) to its joint venture (JV) partner Honda Motor of Japan for Rs.1.8 billion (Rs.180 crore).
The company in a statement Friday said the Honda Motor has bought 18,000,000 shares or 3.16 percent of the total equity in the JV at a negotiated price of Rs.100 per share.
The proceeds from the stake sale will be used in the development of Usha's other businesses.
It said automobile business was not at the core of its current engagements.
"Usha feels that it was inevitable that some day the parting would come because automobiles are not really Usha's direct business," the company said in the statement.
In line with the parting agreement, Siddharth Shriram of the Usha group has ceased to be a director and the chairman in HSCI.
The JV was formed in December 1995 to introduce the Japanese automobile giant's passenger cars and technologies to Indian customers.
The company, which has been in existence for the last 16 years, currently offers product range including hatchbacks and sedans like Brio, Jazz, City, Civic and Accord that are produced at the company's Greater Noida facility.
The company's sports utility vehicle (SUV) CR-V is imported from Japan as completely built units (CBUs).
Currently, the company has two manufacturing facilities at Greater Noida in Uttar Pradesh and Tapukara in Rajasthan.
The company has a strong sales and distribution network with 135 facilities in 83 cities spread across the country.
Recent data has showed a 157 percent growth in sales for the first quarter of the current fiscal which stood at 20,076 units from 7,801 units sold during the corresponding period of 2011-12.
The company has also managed to sell 95 percent more cars during April-July period which stood at 24,462 units from 12,526 units during the like period of last fiscal.