Koyo Seiko of Japan is further increasing its stake in Sona Steering Systems from 7.9 per cent to 20.47 per cent.
The companys board is meeting on 13th October 1997, to consider the issue of 1.2 million equity shares on a preferential basis to Koyo. The issue will be at a premium of Rs 82 per share, almost double its current market price of Rs 48. The proceeds would be utilised by the company for its on going Rs 30 crore power steering project.
Following the issue, the holding of Surinder Kapur and associates will come down from 23.30 per cent to 20.12 per cent. Also, Maruti Udyogs stake will drop from 9.09 per cent to 7.85 per cent.
According to the companys directors, the issue will further strengthen the synergistic alliance with Koyo in the long run. Sona has a license and technical assistance agreement with Koyo. Koyo Seiko is the largest manufacturer of steering system in Japan and the second largest in the world.
The Japanese company has been Sonas technical partner for over a decade. Sona Steering is one of the largest steering gears manufacturer in the country with a capacity of 4,50,000 gears per annum.
The companys clientele includes Maruti, Daewoo and Eicher Motors.
Sona is currently implementing a project to manufacture power steering rack and pinion steering and power steered circulated balls screw steering system for mid-size as well as luxury car segments.
The project is expected to commence production of 50,000 numbers of steering systems in the first quarter of 1998.
Sona Steering has already received letter of intent from Maruti Udyog and Hindustan Motors for supply of power steerings.
The company recorded a sales of Rs 154.41 crore in 1996-97 as against Rs 127.65 in the previous year. Net profit for the year was Rs 9.37 crore as against Rs 9.09 crore last year.
