| PTL holds 3.045 million Swaraj Mazda shares, representing a 29.04 per cent stake in the commercial vehicle maker. Out of this, the company's board has decided to sell 1.573 million shares to Sumitomo. With this acquisition, Sumitomo's stake in Swaraj Mazda will go up from 10.4 per cent to 25.39 per cent. |
| It could not be ascertained why Sumitomo was keen to up its stake in Swaraj Mazda (2003-04 turnover: Rs 478 crore). |
| The company has lost market share over the last few years. For the period April-November 2004, its share in the commercial vehicles market stood at 3.83 per cent, according to the Society of Indian Automobile Manufacturers. Punjab Tractors' and Swaraj Mazda officials could not be contacted for their comments. |
| The deal comes at a time when an open offer by Actis for a 25 per cent stake in Swaraj Mazda is on. |
| Though the open offer had opened at Rs 315 per share on December 19, 2004, Actis last week raised the offer price to Rs 400 per share. The open offer closes on January 17. Actis' shareholding in Swaraj Mazda before the open offer was 15 per cent. |
| If the offer gets fully subscribed, it would rise to 40 per cent. Actis, carved out of CDC, is also a significant shareholder in Punjab Tractors, having acquired the 23.49 per cent stake of the Punjab State Industrial Development Corporation in 2002. It has two nominees, Donald Peck and Steven Enderby, on the 11-member Punjab Tractors board. |
| Today's development follows a letter writen by Sumitomo seeking to raise its stake in Swaraj Mazda. |
| "In the context of the company's relationship with Sumitomo as joint venture partners in the commercial vehicle venture set up under Swaraj Mazda Ltd and covered by terms & conditions under the joint venture agreement dated October 5, 1984, the company's board decided to respond favourably to Sumitomo's request," Punjab Tractors said in a communication to the BSE. |
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