The decision to bring in additional equity through private placement was taken by board of the motorcycle manufacturer last month in Singapore, company sources said.

After the private placement the stake of escorts group and Yamaha Motor Corporation of Japan in the 50:50 joint venture would go down to 37.5 per cent each. At present, Escorts Yamaha has a paid up capital of Rs 27 crore.

The sources said the modalities of the private placement were being worked out and the company would soon appoint lead managers for the offer.

Escorts Yamaha, the fourth largest motorcycle manufacturer in the country, is inducting fresh equity through private placement to raise resources for modernising the existing facilities.

The company has chalked out a plan to upgrade its existing models to meet year 2000 emission norms, one of the most stringent emission standards in the world.

The equity infusion would generate about Rs 100 crore to part finance Rs 500 crore modernisation and expansion plan of the company, the sources said.

Escorts Yamaha, which has already invested about Rs 350 crore for converting bulk of its products from two-stroke to four-stroke vehicles, is planning to pump in another Rs 140 crore.

The company is planning to raise the number of four-stroke vehicles from its stable to about 90 per cent by 2002-03.

However, it would continue to produce a limited two-stroke models for export markets.

Escorts Yamaha currenty has a market share of 13.4 per cent in the motorcycle segment, behind Hero Honda, Bajaj Auto and TVS Suzuki.

During April-August this year, the company sold 86,737 motorcycles compared to 277,319 sold by Hero Honda.