The board of directors of EYML will meet on May 26 to approve the new name. "We will be handing over the entire business and management to Yamaha on May 26,'' Escorts group chairman Rajan Nanda said here on Monday.

The existing board of directors would also resign that day and a new board would be constituted. "Even I am not aware of the new board structure, so I cannot give any details on the same now," he added.

Pursuant to the sell-off, the Escorts brand name is likely to go off the bikes being manufactured and marketed by Yamaha Motor Escorts Ltd. "The motorcycles were hitherto being sold under the Escorts-Yamaha brand name, but now it would be marketed with just the Yamaha tag.

Regarding EYML's plans to raise funds through private placement and an initial public offering, Nanda said, "the fund raising options would now be decided by Yamaha. But I believe they would be infusing fresh equity into the venture rather than raising debt." He also refused to comment on EYML's planned foray into the scooter segment stating that the new business decisions would now be taken by Yamaha after the Japanese partner takes control of the joint venture company's management.

When asked if Escorts would be willing to wash its hands off the entire holding in Escorts-Yamaha, Nanda said, "I have no intentions of selling off the entire stake to Yamaha. Escorts will retain the 26 per cent stake we now hold in the venture." The Foreign Investment Promotion Board (FIPB) had earlier approved Yamaha's proposal to infuse Rs 200 crore fresh equity into EYML for hiking its stake in the venture from 50 per cent to 74 per cent.

As per the agreement between the two partners, Escorts will have the first right of refusal if Yamaha decides to offload the stake in future. "The entire transaction is likely to be completed by May-end or beginning of June this year."

Nanda had earlier said, "It is our firm belief that through this change in equity pattern, the company will be able to build global capabilities, bring in unrestricted technology and offer a wide range of cost effective quality products, which would have a cutting edge over competitors' prices."

Nanda added that the company would have the additional benefit of enlarging its scale of operations for manufacturing and supplying products worldwide. On its part, Escorts will continue to provide a stronger base for manufacturing facilities, countrywide dealership network and skilled manpower. Stating that Escorts and Yamaha have enjoyed a successful and cordial relationship, Nanda had said, "we are confident that with the change in management, the business will grow even more substantially in the coming years and help improve upon our market share." The motorcycle business was a division of Escorts Ltd before it was hived off into a separate company and collaboration signed with YMC.