New Delhi: Japanese auto giant Suzuki Motor Corp’s stake in subsidiary Maruti Suzuki has gone up to 56.21% after merger of its engine and transmission maker Suzuki Powertrain into India’s largest car maker.
In a filing to the Bombay Stock Exchange (BSE) on Monday, Maruti Suzuki India (MSI) said Suzuki Motor Corporation’s (SMC) stake in MSI has increased to 56.2% from 54.2% due to a share swap agreement with the domestic car market leader to acquire Suzuki Powertrain India Ltd (SPIL).
Prior to the merger, SMC held 70% stake in SPIL, while the rest was held by MSI. In June 2012, MSI had announced plan to merge SPIL with itself in order to prepare itself to meet increasing demand for diesel vehicles. At that time, SPIL was supplying 3 lakh diesel engines and transmissions every year to MSI.
As per the merger agreement, the swap ratio was fixed at 1:70, which meant SMC received one share of MSI of Rs.5 each for every 70 shares of Rs.10 each it held in SPIL. MSI made a fresh issue of 13.17 million shares to SMC in lieu of the Japanese parent’s 70% holding in SPIL. As per the understanding, there was no cash outflow from MSI as the merger was effected through a share swap agreement.
SPIL’s turnover in 2011-12 stood at Rs.4,550 crore with a net profit of Rs.150 crore. It also had a debt of Rs.550 crore, which went into MSI’s book. Shares of MSI were trading 0.10% up at Rs.1,281 apiece on BSE during late afternoon.