New Delhi: Maruti Suzuki India will finally go ahead with its much-delayed minority shareholders voting to let parent Suzuki invest and own the upcoming plant in Gujarat on November 16.
The board of directors of the company on Tuesday approved seeking nod from shareholders through postal ballot/online voting from November 16 to December 15.
Maruti Suzuki India chairman R C Bhargava said: “Board discussed voting by minority shareholders on Gujarat plant and approved the final contract manufacturing agreement with Suzuki. The voting will commence on November 16. It will have to be kept open for 30 days, so it will end on December 15.”
Results of the voting will be announced on December 17, he added.
In order to reach out to the investors, the company has already started roadshows across various locations.
“We have already started road shows. We had one round of meetings in Mumbai and Singapore with investors. In Hong Kong it will be on November 2-3 and UK on November 5-6. As far as regulatory approvals are concerned, the company has received all necessary nods from all agencies,” Mr Bhargava said.
Everything is cleared and even the Gujarat government has given its approval, he said, adding that there is no pending approval from any of the regulatory agencies.
When asked how confident the company is of getting nod from minority shareholders, he said: “We are very confident. It is a very good deal for them. I don’t expect shareholders to let pass this bonanza.”
Gujarat was initially planned to be operationalised in May 2017 but “I believe that it may be possible to advance it by a couple of months earlier than that”, he added.
“In 2016 Gurgaon and Manesar will be more than fully utilized, so we need the capacity from Gujarat to meet demand,” Mr Bhargava said.
Last year, under pressure from institutional investors, Maruti Suzuki had decided to seek minority shareholders’ approval after tweaking some of the earlier proposals for the controversial Gujarat plant, which it had initially planned to set up on its own.
However, the voting was delayed due to changes in regulations and MSI deciding to comply requirements under the amended Companies Act.
Maruti has been undertaking road shows, to convince both global and domestic investors on its decision to let its parent own the plant at Gujarat, which was initially proposed to be set up by the company.
It is for the second time that the company is conducting such campaigns. Last year, Maruti Suzuki India’s management, led by Mr Bhargava, had met institutional investors in the US, the UK, Asia and India.
Initially, the Gurarat plant was proposed to be owned by Maruti Suzuki but the plan was changed later with its Japanese parent Suzuki Motor Corporation announcing in January last year that it would invest $488 million to build the Gujarat plant.
The change was however opposed by institutional investors forcing the company to seek minority shareholders’ approval on the matter.
Opposing the move, Maruti’s institutional investors approached market regulator Sebi (Securities and Exchange Board of India), seeking its intervention to safeguard the interests of minority shareholders.
Private sector mutual funds and insurance companies, which own almost 7 per cent of the company, led the opposition.
The plant is envisaged to have installed capacity of 7.5 lakh units annually. It is expected to be operational by May 2017. At present, MSI’s two units at Gurgaon and Manesar have a total production capacity of 1.5 million units annually.