The Hindu Business Line : Punjab Tractors sells entire stake in Swaraj Mazda

New Delhi, Dec. 30 Mahindra and Mahindra-owned Punjab Tractors Ltd on Tuesday announced its plans to sell its remaining stake of 14.4 per cent held in Swaraj Mazda to Sumitomo Corporation. Sumitomo already has a 39.49-per cent stake in the tractor and commercial vehicle company, Swaraj Mazda Ltd.

The deal, which would lead to the transfer of 14.72 lakh shares of Punjab Tractors to Sumitomo at a price of Rs 272 a share, would increase the share of the Japanese corporation in Swaraj Mazda to 53.53 per cent. The date of proposed acquisition is January 6, 2009. For Punjab Tractors, the deal is expected to garner around Rs 40 crore. When contacted, Mr Anjani Kumar Choudhari, President, Mahindra and Mahindra Farm Equipment Sector and Chairman Punjab Tractors, told Business Line, “Our investment in Swaraj Mazda has been there for long. We have been diluting our stake. We felt that now it is a good time to encash it entirely at the price at which we have been able to negotiate the deal.”

He said Punjab Tractors had no plans currently to expand the business with the estimated Rs 40 crore that the deal will fetch. Sumitomo Corporation, the Japanese diversified business conglomerate, has been increasing its stake gradually in the homegrown entity Swaraj Mazda since 1984. It acquired 26 per cent stake along with Mazda then and Punjab Tractors holding stood at 29 per cent. In 2005 also, Punjab Tractors had divested 15.73 lakh shares, shedding almost 15 per cent of its stake to Sumitomo Corporation.

On Tuesday, the shares of Swaraj Mazda opened at Rs 208.75 on the BSE and closed at Rs 200.50 while the scrip of Punjab Tractors marginally increased to Rs 92.50 from the day’s opening at Rs 90.20.

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