Hero MotoCorp has acquired certain tangible and intangible assets of EBR that will help the company’s in-house R&D team to fast track development on existing projects.
Securing its own future in a way, very recently news had come in that Hero MotoCorp will buy out its technical partner Erik Buell Racing (EBR) after the company filed for bankruptcy earlier this year. Now, Hero has officially announced that its American subsidiary HMCL NA, Inc. and HMCL Americas, Inc. have entered into a ‘Settlement Agreement’ with EBR to acquire the ownership of certain tangible and intangible assets that are clear of all impediment for a price of $2.8 million (approx. Rs. 18 crores).
Hero stated that the settlement will help the company’s in-house research and development teams to fast track the development of certain consulting projects as well as those projects that EBR was executing on behalf of the Indian auto giant, prior to filing bankruptcy. The settlement agreement though is dependent on the approval of the US Circuit Court and of the board of directors of Hero, authorising the association between both the parties involved in the settlement agreement. The notice of motion for the agreement will be filed with the Circuit Court in the following days, said the official statement.
This is certainly a big relief point for EBR that has been struggling to exist. While Hero already owned a 49.2 percent stake in the US based company, the new purchase will give the automaker a larger controlling stake in the performance bike maker. This is certainly a big plus for Hero’s future projects as the EBR’s R&D division will be accelerating the development on the HX250R among other projects. That said, details on how EBR will pan out for the future are still missing and we would certainly like to see the company redeem itself.
Erik Buell Racing had filed for bankruptcy under Chapter 128 with the Circuit Court in Wisconsin, US in April this year citing a debt of $20 million (approx. Rs. 125 crores). The US based manufacturer had entered into a strategic technical partnership with Hero back in 2013, post its split with erstwhile partner Honda. The latter had been heavily relying on EBR to mark its entry in the premium two-wheeler space and even showcased the first prototypes in the form of the HX250R and Hastur at the 2014 Auto Expo. It now seems that a lot of those plans won’t cease to exist on paper.