Maruti appoints Kotak Mahindra and Axis Capital to woo investors for Suzuki Gujarat deal
Indian company, Maruti Suzuki was to build a car manufacturing plant in Hansalpur, Gujarat. Later, it was revealed that not Maruti Suzuki, but Suzuki India (100% subsidiary of Suzuki, Japan), will build this plant. Some of the Maruti Suzuki investors did not agree, and now investment bankers have been hired for investor nod.
The Suzuki Motor Corp proposed plant in Gujarat will see Maruti Suzuki contracted to the plant which is an unusual proposition according to experts who fear that this would undermine the Indian auto major and affect shareholder value as income would be diverted to the parent company. In the meantime, MSIL is going ahead with plans and have entered into contracts with Kotak Mahindra Capital and Axis Capital who will identify investors from across the globe, arrange meetings with them and offer any sort of logistic support.
MSIL also seeks minority shareholder approval under Section 188 of Company Act for which it requires the support of three fourth of its public shareholders to ensure that this proposal is passed. Suzuki Motors holds 56.21% stake in MSIL, while the balance is held by public.
via Economic Times
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