Representatives of the Indian partner in EYML have already given their consent to the idea and would be placing it before the representatives of Yamaha Motor Company for final approval at a board meeting in Japan on Friday, company sources said here on Thursday.

Escorts had decided to go in for private placement of equity after its proposal for a public issue to raise funds had fallen through. The final percentage of stake to be divested through this route would be decided once the proposal is approved by Yamaha.

The Indian directors on the board of Escorts Yamaha, including chairman Anil Nanda, Rajan Nanda and joint managing director Nikhil Nanda, have already left for Japan for the board meeting.

"We have in-principle agreed to go in for private placement of equity as plansto float a public issue had to be buried in view of the depressed capital market conditions. The proposal would now be taken up with yamaha and once it accords consent to the idea, modalities of the same would be finalised," the sources added.

It is also yet to be decided whether the entire equity would be divested in favour of a single entity or different companies.

It may be recalled that Foreign Investment Promotion Board (FIPB) had recently granted go-ahead to Yamaha Motor Company for infusing Rs 30 crore, by way of redeemable preference shares, into Escorts Yamaha.

However, this had not resulted in any alteration in the equity holdings of the two partners. Presently, both Escorts and Yamaha control 50 per cent stake each in the venture.

EYML had sought this additional support from the partners in view of the increasing investments that the company is making for introducing new models, which includes a four-stroke bike, the first from the company's stables.

The company was, till recently, caughtin the thick of a 70-day-long industrial unrest at its Surajpur unit in Uttar Pradesh. The company had lost close to Rs 200 crore besides a huge market share due to the tools-down strike.

According to the sources, the company is now working towards minimising the losses it had accounted due to the strike. "we are looking at reducing it."

EYML has also undertaken a major business process re-engineering programme (BPR) to reduce costs and achieve efficiency so that the break-even level of the plants is reduced to optimise higher return on investment for the company.

The company has recently introduced a four stroke model (YBX) in the market which has been well received. The company is planning to introduce products to cater to all segments of two wheeler industry in future.

However, the company has put its much-publicised foray into scooters on the back-burner. "We have put the project in limbo. It is very much alive, though not proactive," the sources said.

However, the company has not specified anytime frame to revive the project. Though the company had initiated groundwork towards developing the models, EYML is not keen on immediately going ahead with the scooter project in view of the slowdown in the segment.

A slowdown in the scooter market had forced the company to put off the project for some time and concentrate on its core competency of manufacturing motorcycles, which is also the high-growth segment of the two-wheeler industry.