 "Motherson Sumi shares tank over 9% after group restructuring announcement")
Shares of auto components major Motherson Sumi Systems Ltd (MSSL) fell over 9 per cent on Friday after the company announced a group restructuring plan.
The company will demerge its domestic wiring harness (DWH) business into a new firm that will eventually be listed.
Reacting to the development, the stock plunged 9 per cent to Rs 94.30 on the BSE.
On the NSE, it declined 9.11 per cent to Rs 94.20.
The reorganisation has been approved by the respective boards of MSSL and group firm Samvardhana Motherson International Ltd (SAMIL).
As part of the restructuring, after the demerger of DWH, SAMIL will be merged into MSSL to consolidate 100 per cent shareholding in Samvardhana Motherson Automotive Systems Group BV (SMRP BV) as well as to bring all auto component and allied businesses in SAMIL under MSSL, the company said in a statement on Thursday.
The group reorganisation plan realigns interests of all its stakeholders and creates a simplified corporate structure for growth of businesses across product portfolios within the auto components space and allied operations, it added.
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The proposed reorganisation aims to simplify group structure and enable MSSL shareholders to benefit through 100 per cent stake in SMRP BV; create a separate independent entity for DWH business with focused approach on this business; and align interest of all stakeholders by bringing all auto component and allied businesses in SAMIL under a listed entity, it said.
MSSL said the demerger of its DWH business into a new company, which will eventually be listed, will mirror the shareholding of the company. For every one share held in MSSL, one share of the new company would be allotted.