Financial Daily from THE HINDU group of publications
Friday, May 31, 2002
Industry & Economy
Corporate - Rights Issues
Suzuki in driver's seat at Maruti
NEW DELHI, May 30
JAPAN'S Suzuki Motor Corp on Thursday officially took management control of the country's largest carmaker Maruti Udyog Ltd, for which it handed over a cheque of Rs 1,000 crore to its partner, the Indian Government.
With this, the second stage of the Government's plan to exit from Maruti has been flagged off in which Suzuki's stake will initially rise to about 54.20 per cent through a Rs 400-crore rights issue, which the Government will renounce.
The first round of public issue may come in the third quarter of the calendar year, after which the Government stake will fall to 25 per cent. The Government plans to exit from the company entirely by 2004.
The exact timing of the book-building-route public issue will depend a lot on the "prevailing market conditions," Government sources said. "We are looking around September-November time period, around Deepavali," they said. The Suzuki Motor Chairman and Chief Executive Officer, Mr Osamu Suzuki, handed over the cheque to the Heavy Industries Minister, Mr Suresh Prabhu, here. An extraordinary general meeting of the company shareholders met here on Thursday after the handing over of the cheque to ratify the new joint venture agreement signed between the two shareholders.
At the meeting, Mr Suzuki renamed the present incumbent, Mr Jagdish Khattar, as the Managing Director.
Aluminium cast plant
Addressing a press conference here, Mr Suzuki said Maruti would invest about Rs 200-250 crore in setting up an aluminium foundry plant at Manesar, near the company's existing factory at Gurgaon at Haryana.
Mr Suzuki said preparatory work for the project had been done already and the company is hopeful of completing the project in 12 months. "This will give us an advantage, wherein the localisation level of new models (to be launched in the future) will be higher to start with," he said.
Mr Suzuki skirted a question on whether the Japanese company would now transfer the gearbox technology to India, which became a bone of contention between the two partners five years ago.
`We are already 70 per cent indigenised on the gearbox. I don't know what technology you are talking about," he said.
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