Japanese auto giant Suzuki Motor Corp’s stake in subsidiary Maruti Suzuki has gone up to 56.21 per cent after merger of its engine and transmission maker Suzuki Powertrain into India’s largest carmaker.
In a filing to the BSE on Monday, Maruti Suzuki India said Suzuki Motor Corporation’s stake in the company has increased to 56.2 per cent from 54.2 per cent due to a share swap agreement on Suzuki Powertrain India Ltd (SPIL).
Prior to the merger, Suzuki Motor held 70 per cent stake in SPIL, while the rest was held by Maruti.
In June last year, Maruti had announced plan to merge SPIL with itself 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 Maruti.
As per the merger agreement, the swap ratio was fixed at 1:70, which meant SMC received one share of Maruti Suzuki of Rs 5 each for every 70 shares of Rs 10 each it held in SPIL.
Maruti Suzuki made a fresh issue of 13.17 million shares to SMC in lieu of the Japanese parent’s 70 per cent holding in SPIL.
As per the understanding, there was no cash outflow from Maruti Suzuki 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 Maruti’s book.
Shares of Maruti Suzuki closed at Rs 1,283.15, up 0.27 per cent.