It has been nearly two years since the Maruti Suzuki board first passed the proposal. And on Thursday, company’s minority shareholders approved it, allowing the country’s largest carmaker to let its Japanese parent Suzuki Motor Corporation (SMC), which holds a 56.2 per cent stake in the company, to invest and own the upcoming plant in Gujarat.
The shareholders approved the move with 89.75 per cent voting in favour through a postal ballot that took place from November 16 to December 15. Just 10.25 per cent minority shareholders voted against the proposal. However, only 54.7 per cent of public shareholders participated in the postal ballot, that is, out of 13.2 crore public shareholders only 7.23 crore participated.
“Of the 6.58 crore votes cast on the proposal, 89.75 per cent or 5.90 crore votes were for the proposal, while only 10.25 per cent voted against it. The resolution has been passed and passed quite comfortably,” a jubilant Maruti chairman RC Bhargava told a press conference.
“In all these decisions, the biggest issue raised by investors was that this was a unique transaction and hence investors were uncomfortable with something that hasn’t been done before,” he added.
The approval paves the way for Maruti to expand its capacity to 3 million units once all the units of the Gujarat plant is commissioned in stages compared to 1.5 million currently.
The first line with a capacity of 250,000 units will be operational in early 2017.
The expansion will see six separate lines of 250,000 each as per the market demand, Bhargava said, adding that by 2020 it appears that the capacity needed will be 2 million.
Operationally, the Gujarat plant will function as any other Maruti plant,” Bhargava added. FE