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The country's largest carmaker Maruti Suzuki India will kick off a roadshow this month to explain to global and domestic investors its move to let parent Suzuki Motor Corp own a proposed plant in Gujarat.
According to sources, the company's management led by Chairman R C Bhargava, along with Managing Director and CEO Kenichi Ayukawa and Chief Financial Officer Ajay Seth will meet institutional investors from the US, UK, Asia and India.
"It is a two-month long programme starting from the middle of June to middle of August. The meetings with the institutional investors will take place during this period," a source said.
A Maruti Suzuki India spokesperson did not comment.
"Once the roadshow is over, the process for voting by shareholders will start," a source said.
In March, under pressure from institutional investors, Maruti decided to seek the approval of minority shareholders after tweaking some of the earlier proposals for the Gujarat plant, which parent Suzuki Motor Corp (SMC) had decided to take over.
In January, SMC announced it would invest $488 million to build the Gujarat plant, which Maruti had earlier proposed to set up.
Opposing the move, Maruti's institutional investors approached Sebi, seeking its intervention to safeguard the interests of minority shareholders. Private sector mutual funds and insurance companies, which own almost 7 per cent of the company, led the opposition.
Yesterday, Maruti officials, including Bhargava and Ayukawa, met Gujarat Chief Minister Anandiben Patel to discuss issues arising out of the changed plant ownership structure.
Revising the earlier proposals, Maruti stated that investments in the Gujarat plant would be funded by SMC via a wholly owned subsidiary through depreciation and equity brought in by the parent without a 'mark-up' on cost of production, as was proposed before.
Also, in case the contract manufacturing agreement between them is terminated, the facilities of the Gujarat subsidiary would be transferred to Maruti at book value and not at fair value, as was envisaged earlier.
The company also stated that the impact of any direct or indirect taxes on account of the contract manufacturing agreement would be assessed before finalising the accord.
SMC had proposed to invest in the plant through a wholly owned unit, Suzuki Motor Gujarat.
The plant, which would be SMC's first fully owned factory in India, is being planned with an initial capacity of 1,00,000 units a year, all of which will be supplied to Maruti.
