New Delhi: Auto component major Motherson Sumi Systems (MSSL or the Company) Thursday said it has approved a group reorganization plan with the objective of creating value for the shareholders.
The reorganization realigns interests of all its stakeholders and creates a simplified corporate structure for growth of businesses across product portfolios within auto components space and allied operations, the company said in a statement.
The reorganization plan approved by the respective boards of MSSL and Samvardhana Motherson International Limited (SAMIL) among other things, entails demerger of Domestic Wiring Harness (DWH) business from MSSL into a new company which is in the process of being incorporated as a wholly owned subsidiary of MSSL and subsequent merger of SAMIL into MSSL to consolidate 100% shareholding in Samvardhana Motherson Automotive Systems Group BV (SMRP BV) as well as to bring all auto component and allied businesses in SAMIL under MSSL.
The statement added, “The proposed reorganization aims to: simplify group structure and enable MSSL shareholders to benefit through 100% stake in SMRP BV; create separate independent entity for DWH business with focused approach on this business; align interest of all stakeholders by bringing all auto component and allied businesses in SAMIL under listed entity; create strong platforms for growth.”
To give effect to the proposed reorganization, the Board of Directors of MSSL in its meeting today approved the demerger of DWH business of the company into a New Company, which will eventually be listed, with mirror shareholding as that of the Company. For every one share held in MSSL, one share of New Company would be allotted
The Board also approved the merger of SAMIL, the principal holding company of Motherson Group and promoter of MSSL, into MSSL. For every 10 shares held in SAMIL (of face value Rs. 10 each), 51 shares of MSSL (of face value Re. 1/l each) would be allotted. MSSL will be renamed as Samvardhana Motherson International Limited.
The trabsaction is to be effected pursuant to a Composite Scheme of Amalgamation and Arrangement and is subject to receipt of regulatory and other approvals inter-alia approval from shareholders, creditors, NCLT etc. as may be applicable. It is likely to be completed by Q2FY22.
Vivek Chaand Sehgal, Chairman, MSSL said, “The simplification of group structure has been a long-standing request from our shareholders and the proposed reorganization is a step in that direction. The transaction helps create strong business platforms under the Motherson umbrella which will enhance stakeholder value for the long term.”
The company will now be taking necessary steps to give effect to the scheme including regulatory approvals as required as well as approval of shareholders of the company .
Source: ET Markets