BAE awaits govt nod to pick 49% stake in Mahindras

BAE awaits govt nod to pick 49% stake in Mahindras
PTI
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First Published: Thu, Sep 04 2008. 04 49 PM IST
Updated: Thu, Sep 04 2008. 04 49 PM IST
New Delhi: UK’s BAE Systems said that it is awaiting the government’s approval for picking up a 49% stake in a defence joint venture with Mahindra group.
India has restricted foreign participation in domestic defence production in the private sector to about 26% and the government is already debating the possibility of allowing foreign companies to pick up 49% stake.
“We are picking up a 49% shareholding in M&M’s defence venture, for which we have sought clearance from the Indian government,” BAE Systems India’s president Julian Scopes said.
BAE Systems’ proposal needs to be cleared by the government’s Foreign Investment Promotion Board (FIPB).
Due to the restrictions, BAE Systems has sought an exception to the rule from the government, as it has done in the case of some Defence Public Sector Undertakings (PSUs).
“Rules say exceptions can be made. We have made the request through the FIPB in May-June this year and are in discussions with the government. The Indian Defence Ministry has an important say in this regard and we are waiting to hear from the government on our request,” Scopes said.
Under the arrangement with automotive-to-technology conglomerate Mahindras, BAE Systems would bring in global intellectual capabilities in land vehicles systems, particularly in the area of mine protected vehicles for which the British major has done advanced technology development work in South Africa.
“With India’s need for mine-resistant vehicles on the rise, BAE Systems sees greater scope for their business to expand in the Indian defence market,” he said.
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First Published: Thu, Sep 04 2008. 04 49 PM IST