New Delhi: Country’s largest carmaker Maruti Suzuki India (MSI) expects to ‘soon’ get a crucial clearance from the Gujarat government to allow its parent Suzuki Motor Corp to own the upcoming plant in the state.
The auto major will be able go ahead with the much-delayed minority shareholders vote on the issue only after it gets approval from the state government.
“At all levels there is agreement as to what has to be done. It’s just the processing of the paperwork. In government it takes a little bit of time to get the paper through all the various stages…That’s what is happening. It will happen very soon,” MSI Chairman RC Bhargava told PTI.
The carmaker is yet to get clearance from the Gujarat government for letting parent Suzuki Motor Corp own and invest at the plant. Initially, the facility was proposed to be owned by Maruti Suzuki but the plan was changed later.
The change was, however, opposed by institutional investors forcing the company to seek minority shareholders’ approval on the matter.
“The moment we get all these papers in place, because lots of documents are required to do that, we will first do investor road show and then announce the date of the voting,” Bhargava said.
The company plans to kick start an investor roadshow next month to explain its move for letting parent SMC own upcoming plant in Gujarat.
“We have sought dates from the investors and it could start as early as October. We will explain to the investors what we are doing and if they have any question about Gujarat plant, contract manufacturing, we will try to clarify their doubts so that when they vote they are fully knowledgeable,” Bhargava said.
The company, for the second time, would approach global and domestic investors through road shows. Last year also the company’s management led by Bhargava, along with senior officials, had met institutional investors in the US, the UK, Asia and India.
“We did it last year but then it has been a year since. There has been a lot of change in shareholdings and people have changed and so forth. These roadshows would be at least in Singapore, Hong Kong and London,” Bhargava said.
MSI had initially planned to set up a new plant in Gujarat, its third, to meet the growing demand. However, in January last year, parent Suzuki Motor Corporation announced it would invest USD 488 million to build the Gujarat plant.
Opposing the move, Maruti’s institutional investors approached capital markets regulator SEBI, 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.