Hero’s US technology partner files for bankruptcy

Motorcycle manufacturer Erik Buell Racing (EBR), the technology partner of Hero MotoCorp, has filed for bankruptcy and shut down operations in the US. The move has jeopardised Hero's plans to foray into the American market as well as its investment in EBR.

The news sent Hero's share price down 3.76% to ₹ 2,428.85 on the BSE.

EBR was Hero's first tieup, after the latter sought to shore up its research and development (R&D) capabilities after its break-up with long-time partner Honda in 2010. A year after the tie-up in 2012, Hero invested ₹ 48 crore for a 49.2% stake in EBR.

"We thought we had secured funding, but we were not able to get the funding in place. Now we need to do the best we can for the interest of all parties," said Eric Buell, founder, EBR.

Hero has three other technology partners — Engines Engineering, Austria's AVL and Italy's Magneti Marelli — and is also set to operationalise its in house R&D facility at Kukas near Jaipur in 2015-16.

"Hero MotoCorp remains confident that its future product line-up would not be affected despite EBR ceasing operations," the company said.

The company did not clarify on what impact EBR's bankruptcy would have on its US foray as it had hoped to utilise EBR's dealer network there. A senior executive told HT it hoped to retrieve at least a part of its investment in the company during the bankruptcy proceedings, but agreed that a large part may have to be written down.

Hero's upcoming 250cc bike HX250R (in picture) has been developed in collaboration with EBR. It is expected to be launched later this year.

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