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Maruti Suzuki to seek shareholder nod on Gujarat plant next month

Monday, 1 September 2014 - 11:45am IST | Place: New Delhi | Agency: dna
Company needs 3/4th of minority shareholders' nod, who hold 44% stake, to approve the proposal through a special resolution

Maruti Suzuki India is confident of getting minority shareholders' nod to let parent Suzuki Motor Corp own and invest in its Gujarat facility and has no second option.
"We are thinking of getting voting (done) in October... There is no plan B, I can't see why it should not happen," Maruti Suzuki India chairman R C Bhargava said.
He was responding to a query on whether Maruti had other plans if it failed to get the minority shareholders' nod. He was sure of the minority shareholders' nod and that was why the company was not having any second option.
In March, under pressure from institutional investors, Maruti had decided to seek minority shareholders' approval after tweaking some of the earlier proposals for the controversial Gujarat plant.
The company needs 3/4th of the minority shareholders, who hold 44% stake, to approve the proposal through a special resolution.
Bhargava said the management had been busy explaining to its investors, both domestic and overseas, over the past couple of months and they have understood the company's position.
"By bringing in that money (Suzuki's) here we get a very low cost money instead of putting our money. So I get the benefit of low cost money and we get a benefit of having more liquidity, money that I can use without much concern about straining my balance sheet," he said.
The move by parent Suzuki to invest in Gujarat is mainly due to the increasing significance of India in the Japanese firm's global operations, he said.
"Essentially, what has driven the decision to let Suzuki to finance the Gujarat plant is really that Suzuki now understands that their future as a global car maker is going to be increasingly dependent on India," he said.

With inputs from Agencies




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