Motherson Sumi board approves group reorganisation

The Motherson Sumi Systems(MSSL) board has approved a group reorganisation plan with the objective of creating value for the shareholders. The reorganisation aims to simplify corporate structure for growth of businesses across product portfolios within auto components space and allied operations.

The reorganisation plan approved by the respective boards of MSSL and Samvardhana Motherson International (SAMIL) entails demerger of Domestic Wiring Harness (DWH) business from MSSL into a new company which is in the process of being incorporated as a wholly owned subsidiary of MSSL. The board also approved the subsequent merger of SAMIL into MSSL to consolidate 100% shareholding in Samvardhana Motherson Automotive Systems Group BV (SMRP BV) and bring all auto component and allied businesses in SAMIL under MSSL.

The reorganisation aims to:

• Simplify Group structure and enable MSSL shareholders to benefit through 100% stake in SMRP BV.
• Create separate independent entity for DWH business with focused approach on this business.
• Align interest of all stakeholders by bringing all auto component and allied businesses in SAMIL under listed entity.

As per the merger plan of SAMIL into MSSL, for every 10 shares held in SAMIL (of face value Rs 10/- each), 51 shares of MSSL (of face value Re 1/- each) would be allotted. MSSL will be renamed as Samvardhana Motherson International.

Commenting on the reorganisation, Vivek Chaand Sehgal, Chairman, MSSL said, "We are happy to receive approval from the Board of Directors for the Scheme. The simplification of group structure has been a long-standing request from our shareholders and the proposed reorganisation is a step in that direction. The transaction helps create strong business platforms under the Motherson umbrella which will enhance stakeholder value for the long term."

Laksh Vaaman Sehgal, Director, MSSL added that, “This Transaction provides MSSL shareholders with the opportunity to participate in 100% value of SMRP BV and also brings all auto related businesses  under listed entities, which aligns interest of all stakeholders. It demonstrates our commitment towards taking actions that meet expectations of our stakeholders. The transaction further strengthens our  position as a leading, globally diversified and preferred auto component supplier that serves the world’s most admired brands.”