Bajaj to wrap up Maha Scooters buy by June

Bajaj Auto Ltd chairman and managing director Rahul Bajaj on Thursday said he expected to complete the acquisition of Western Maharashtra Development Corporation Ltd's (WMDC) 27 per cent stake in Maharashtra Scooters Ltd. by June-end. The price for WMDC's stake is likely to be fixed by the end of May, he said.

"The price for WMDC's stake in Maharashtra Scooters is likely to be fixed by May-end and the deal will be finalised by June-end," Bajaj told reporters on the sidelines of the India Trade and Investment Forum.

Bajaj also clarified that there was no intention to merge Maharashtra Scooters with Bajaj Auto Ltd.

The arbitration proceedings are currently on between WMDC and Bajaj Auto Ltd over the sale of the former's stake to Bajaj Auto Ltd.

These proceedings started over two years ago as a result of a disagreement over the price of WMDC's stake. While Bajaj Auto Ltd offered to buy WMDC's stake at Rs 75 per share, WMDC quoted Rs 230 rupees a share. Bajaj Auto Ltd holds 24 per cent stake in Maharashtra Scooters. The remaining stake is with the public.

Over the issue of dispute with his younger brother Shishir Bajaj, Bajaj pointed out that a settlement is likely by the end of June. Shishir Bajaj is seeking separation from the group after selling his stake in Bajaj Auto Ltd to the rest of the family. The dispute is over the valuation of his stake in the country's second-largest two-wheeler company.

On the proposed plan to split Bajaj Auto Ltd into an investment and manufacturing company, Bajaj said that it would take around three years for this plan to materialise.

"The demerger is likely to get short-shrift as the new management team has to take into account the new policies. The issue has not been forgotten. It may take three or more years though," he revealed.

Rahul Bajaj also said that his company is likely to sell around 1.8 million vehicles in 2004-05 (April-March) compared with 1.5 million units in the previous year. The company expects to close 2004-05 with exports of around 1,97,000 vehicles compared with 1,56,000 last year, he added.

Bajaj was speaking on the sidelines of the India Trade and Investment Forum organised by Confederation of Indian Industry in New Delhi.

In the first 10 months of 2004-05, total sales of Bajaj Auto grew by 20 per cent to 1.5 million units. Bajaj also revealed that the company expects the exports to rise by 20-25 per cent as a proportion of sales over the next five years, which would amount to around 12-14 per cent of total sales this year.

At 12:03 IST, shares of Bajaj Auto traded at 1,101.20 rupees on the National Stock Exchange, up 0.44% over Wednesday.