Suzuki extends deadline for IPO

In a letter written recently to the Ministry of Disinvestment and Ministry of Heavy Industry, SMC chairman Osamu Suzuki said “to facilitate the process of the sale of shares by the Indian government, SMC would voluntarily like to extend the date of expiry of the seven affirmative rights conferred on Government of India under the revised joint venture agreement (dated May 15, 2002) from March 31, 2003 to July 31, 2003.”

Thus, the seven affirmative rights of Indian government will be reduced to three only after July 31, 2003 and would automatically lapse after December 31, 2003.

Suzuki noted that “under the same revised agreement, the date of expiry of the put option which currently ends on April 30, 2004 would also be extended to August 31, 2004.”

Referring to the various discussions held between the government and SMC, the letter mentions that it is quite apparent that trying to complete the Maruti offer sale by March 31, 2003 is highly unlikely. Both the offers for extension of respective dates are voluntary, non-amendable and non-extendible under any circumstances, Suzuki mentioned.

According to government sources, the Suzuki’s offer will now be considered in the Cabinet Committee on Disinvestment and come for review to the heavy industry ministry.

Earlier the Indian government was likely to float Maruti’s 36 lakh shares for sale this month itself. However, the proposed sale was deferred for no concrete reasons.

SMC was supposed to submit its business plan for the coming fiscal which has not been done so far. After reducing its equity in the joint venture to 45.4 per cent in May, 2002, the government is supposed to offload its remaining equity through public offer in two tranches by April 2004.