Motherson Sumi Systems Ltd on Friday said that the public shareholders (non-promoter) have voted in favour of the proposal with an overwhelming majority, thus paving the way for successful completion of the proposed restructuring.
Under its proposed group restructuring, the company will demerge its domestic wiring harness (DWH) business into a new company that will eventually be listed.
In a statement, the company said for the NCLT convened meeting regarding the scheme of reorganisation, the voting results showed that 99.44 per cent of the non-promoter shareholders who voted, were in favour of the proposed restructuring.
“Also, the requirement of obtaining creditors approval has been waived off by the NCLT for the scheme. The public shareholders also approved the resolution on Related Party Transaction (RPT) through a separate EGM held on the same day,” Motherson Sumi (MSSL) said.
As part of the restructuring which was announced in July last year, after the demerger of DWH, group firm Samvardhana Motherson International Ltd (SAMIL) is to be merged into Motherson Sumi Systems to consolidate 100% shareholding in Samvardhana Motherson Automotive Systems Group BV (SMRP BV) as well as to bring all auto component and allied businesses in SAMIL under MSSL.
Commenting on the development, MSSL Chairman Vivek Chaand Sehgal said “this is an important step for us to achieve the next phase of growth for our group. The existing automotive business along with the addition of the exciting new business verticals, makes us confident of achieving our Vision 2025 targets,” .
MSSL said it will approach NCLT to approve the scheme. Post the approval from the NCLT, the company will work with the stock exchanges for listing of the securities. “Listing is estimated to be completed by Q2FY21 subject to the receipt of the necessary approvals,” it added.
“MSWIL will benefit from the continued parentage of MSSL along with an increased focus from Sumitomo Wiring Systems, Japan (SWS) to cater to the fast-growing Indian automotive market. Also, MSWIL will bring in exciting new solutions for electric vehicle offerings from our customers,” the statement added.
The company will henceforth fully own its international business Samvardhana Motherson Automotive Systems Group BV (SMRPBV), which not only results in a simplification of the group structure and enhanced cash flows but also further diversifies MSSL’s revenue and product mix by addition of products like automotive lighting, shock absorbers, sheet metal and HVAC, it added.
News Source:- Moneycontrol