Maruti to issue preference shares to Suzuki Motor Corp worth over Rs 12,000 crore

Maruti Suzuki India Ltd. is set to issue 1.23 crore equity shares of the company, each having a face value of Rs 5, to Suzuki Motor Corporation on a preferential basis. “The consideration payable by the company for such purchase of 100 percent of the SMG’s equity shares shall be discharged by way of issue and allotment of 1.23 crore equity shares of the company having a face value of Rs 5 each to SMC, at a price of Rs 10,420 per equity share, on a preferential basis,”  the company said in an exchange filing on October 17.

At 10:30 am, the stock was trading at Rs 10,636, down 0.65 percent from the previous close on the NSE.

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Post the preferential issue of shares, Suzuki Motor Corporation, Japan’s shareholding in India’s largest passenger car manufacturer will go up to 58.19 percent from 56.48 percent earlier.

The issuance of these shares follows Maruti’s board’s decision to terminate the contract manufacturing agreement with Suzuki Motor Gujarat Pvt. Ltd. Furthermore, Maruti exercised its option to acquire the shares of SMG from Suzuki Motor Corporation.

In terms of production, there will be no alteration in the production, logistics, sales, or associated costs. The vehicles that were previously provided by SMG as a contract manufacturer will continue to be supplied in the same manner as before, as per the company’s statement.

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