Maruti Suzuki to issue preferential shares to parent firm Suzuki Motor for Gujarat plant acquisition

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Also Read: Maruti Suzuki plans to add 28 different models in next seven years Maruti Suzuki's board approved the issuance of equity shares to the SMC on Tuesday. The company said that the decision would be subject to applicable regulatory and statutory approvals, as may be required. After the acquision, SMG will become a wholly owned subsidiary of Maruti Suzuki.

Maruti Suzuki shares were trading 0.63% higher at ₹9575.70 apiece on BSE at 11:16 am on Wednesday. Also Read: Maruti Suzuki 3.0: MSIL planning to double production to 4 mn units in 9 years, says RC Bhargava “The Board of Directors, at its meeting held today, has approved issue of equity shares of the company on preferential allotment basis to Suzuki Motor Corporation (SMC), as consideration for the acquisition of 100% stake of SMC in Suzuki Motor Gujarat Private Limited (SMG). This will be subject to applicable regulatory and statutory approval(s), as may be required, including requisite approval of shareholders.

Post such acquisition, SMG will become a wholly owned subsidiary of the Company," said the company in its stock filing. Also Read: What Maruti Suzuki's acquisition of the SMG plant means for minority shareholders On July 31, the Maruti Suzuki board had approved the termination of the contract manufacturing agreement (CMA) with Suzuki Motor Gujarat Private(SMG) Limited and acquiring of shares of SMG from Suzuki Motor Corporation (SMC). The board evaluated two available options for acquiring the SMC equity in SMG, first is payment in cash and issue of MSIL equity shares on a preferential allotment basis.