Motherson Sumi board gives approval for reorganisation of business; stock down 2%

Shares of Motherson Sumi Systems fell over 2% in the morning trade on the BSE after the board gave in-principle approval a reorganisation of business within the group which will demerge domestic wiring harness business of the company into a newly formed legal entity.

The Board of Directors of Motherson Sumi Systems Limited on Thursday said that it has granted, in-principle approval for a reorganization of business within the group which will, inter alia, demerge domestic wiring harness business of the Company into a newly formed legal entity with mirror shareholding, which shall be listed. The said reorganization proposal intends to meet a long-standing request from the Sumitomo Wiring Systems, Japan ("SWS") Joint Venture partner of the Company to keep their participation focussed to domestic wiring harness business in India, which is SWS core area of interest in the Company.

Further, the Board in principle approved the proposal to consolidate shareholding in Samvardhana Matherson Automotive Systems Group B.V. ("SMRP BV") to become 100% under MSSL. This shall be achieved through a process of the merger to bring 49% stake held by Samvardhana Matherson International Limited ("SAMIL") in SMRP BV into MSSL. This will enable shareholders of the Company to participate in 100% of the value of SMRP BV which is currently held by MSSL (51%) and SAMIL (49%). This is subject to SAMIL's Board / Shareholders' approval. This will meet the expectations of the public shareholders for MSSL to consolidate and simplify the structure, the company said in a filing.

The above reorganization once achieved will enable both the companies to fully participate in respective focused areas of growth.

To further progress said reorganisation, the Board of MSSL has constituted a subcommittee of directors to oversee the said process and come back with the Board with a definitive proposal and scheme of reorganization within a period of 90 to 120 days. The Board of MSSL, inter alia, has empowered the said committee to evaluate and also to take all such necessary steps as may be required in this respect.

The reorganization, once approved by the Board post recommendation of the said Committee, shall be subject to requisite regulatory and corporate approvals and shall be governed by the provisions of Companies Act and other applicable laws and regulations, the company added.

Stock view:
Motherson Sumi Systems Ltd is currently trading at Rs135.65, down by Rs3.25 or 2.34% from its previous closing of Rs138.90 on the BSE.

The scrip opened at Rs140 and has touched a high and low of Rs140.60 and Rs131.10 respectively.




About Gosip4U

Gosip4U is the digital wing of india - India's leading media and communications group with its interests spanning across country.

0 comments:

Post a Comment

Please add comment