New Delhi, July 2 (SocialNews.XYZ) Specialised automotive component manufacturer Motherson Sumi Systems' Board on Thursday approved a group reorganisation plan.
According to the company, the reorganisation realigns interests of all its stakeholders and creates a simplified corporate structure for growth of businesses across product portfolios within auto components space and allied operations.
The reorganisation plan was approved by the boards of MSSL and Samvardhana Motherson International.
Among other things, it entails demerger of Domestic Wiring Harness business from MSSL into a new company which is in the process of being incorporated as a wholly owned subsidiary of MSSL and subsequent merger of SAMIL into MSSL to consolidate 100 per cent shareholding in Samvardhana Motherson Automotive Systems Group BV as well as to bring all auto component an d allied businesses in SAMIL under MSSL.
"The transaction is to be effected pursuant to a 'Composite Scheme of Amalgamation and Arrangement' and is subject to receipt of regulatory and other approvals inter-alia approval from shareholders, creditors, NCLT etc. as may be applicable," the company said in a statement .
"The transaction is likely to be completed by Q2FY22."
As per the statement, the transaction accomplishes the long-standing request from the company's joint venture partner, Sumitomo Wiring Systems to keep its participation focused to DWH business in India which is its core area of interest.
"The transaction also enables pursuance of independent strategic priorities for the listed entities, while at the same time entities continue to enjoy the benefit of the parentage of the Motherson Group as well as its strategic partner SWS," the statement said.
"The transaction provides greater flexibility to raise capital at respective entities basis their requirement."
Besides, the company said that for MSSL shareholders, the transaction brings all auto component businesses under listed entities and offers greater operational and financial flexibility to pursue organic or inorganic opportunities in domestic and global arenas.
"The transaction also helps capture full benefit of group synergies by bringing support functions (like logistics, travel, IT etc.) in-house thereby improving cost structure by bringing down overheads through best practices," the statement said.
"The merger of SAMIL into MSSL is expected to be EPS accretive in FY 22, the first year of merger."
Source: IANS
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