 "motherson sumi")
Auto components major Motherson Sumi Systems Ltd (MSSL) on Friday said its public shareholders have voted in favour of its proposed group restructuring under which it will demerge its domestic wiring harness (DWH) business into a new company that will eventually be listed.
As part of the restructuring which was announced in July last year, after the demerger of DWH, group firm Samvardhana Motherson International Ltd (SAMIL) is to 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.
In a statement, the company said for the NCLT convened meeting regarding the scheme of reorganisation, the voting results showed that 99.44 per cent of the non-promoter shareholders who voted, were in favour of the proposed restructuring.
"Also, the requirement of obtaining creditors approval has been waived off by the NCLT for the scheme. The public shareholders also approved the resolution on Related Party Transaction (RPT) through a separate EGM held on the same day," MSSL said.
Commenting on the development, MSSL Chairman Vivek Chaand Sehgal said "this is an important step for us to achieve the next phase of growth for our group. The existing automotive business along with the addition of the exciting new business verticals, makes us confident of achieving our Vision 2025 targets,".
MSSL said it will approach NCLT to approve the scheme. Post the approval from the NCLT, the company will work with the stock exchanges for listing of the securities.
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"Listing is estimated to be completed by Q2FY21 subject to the receipt of the necessary approvals," it added.
MSSL said once the proposed reorganisation is completed, "two growth focused listed companies will emerge".
The first, Motherson Sumi Wiring India Ltd (MSWIL) will be the largest listed automotive wiring harness player in India with a nationwide manufacturing footprint, the company claimed.
"MSWIL will benefit from the continued parentage of MSSL along with an increased focus from Sumitomo Wiring Systems, Japan (SWS) to cater to the fast-growing Indian automotive market. Also, MSWIL will bring in exciting new solutions for electric vehicle offerings from our customers," the statement added.
On the other hand, Motherson Sumi Systems Ltd (MSSL) combined with the business of Samvardhana Motherson International Ltd (SAMIL) "creates a solid platform to achieve our stated Vision 2025".
The company will henceforth fully own its international business Samvardhana Motherson Automotive Systems Group BV (SMRPBV), which not only results in a simplification of the group structure and enhanced cash flows but also further diversifies MSSL's revenue and product mix by addition of products like automotive lighting, shock absorbers, sheet metal and HVAC, it added.
Under its Vision 2025, the company had set a target of achieving revenues of USD 36 billion by FY25, with 40 per cent Return on capital employed (ROCE) consolidated, from USD 8.9 billion in FY20. It had also said that no country, customer or component should contribute more than 10 per cent to its revenues by FY25.
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