May 16, 2002
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May 16, 2002 |
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Suzuki Gains Majority Stake in Maruti Udyog Limited, India |
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On May 15, 2002, following the approval of the Cabinet Committee on Disinvestment, Suzuki Motor Corporation signed with the Government of India the Revised Joint Venture Agreement covering a rights issue by their joint venture, Maruti Udyog Limited (Maruti) and the public offer of Maruti's shares which the government holds currently. Suzuki is going to gain a majority stake in Maruti. The Maruti's Board of Directors resolved a rights issue allotted to the government and Suzuki on May 16. In the rights issue of 4 billion Indian Rupees (11.1 billion Japanese Yen) in total, Suzuki is also undertaking all the rights share allotted to the government. The rights issue price per share will be Rs.3,280 (\9,118), and Suzuki will subscribe 1.22 million shares. Upon its completion, Suzuki's stake in Maruti will increase from 50 percent to 54.2 percent. Suzuki will gain majority control in Maruti and pay Rs.10 billion (\27.8 billion) to the government as a control premium. Toward the closing of the deal, Suzuki will proceed with the required formalities such as Shareholders' Meetings of Maruti, approval by the India's FIPB (Foreign Investment Promotion Board) and others. Suzuki will continue its contribution to healthy development of India's automobile industry through the operation of Maruti. |
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