Overwhelming response to the proposed Group Restructuring, as Public shareholders vote 'In favour', says Motherson Sumi Systems Ltd

Motherson Sumi Systems Ltd. (MSSL) in a regulatory filing has informed the stock exchanges about the outcome of the Hon'ble NCLT convened shareholder meeting. The public shareholders (non-promoter) have voted in favour of the proposal with an overwhelming majority, thus paving the way for successful completion of the proposed restructuring.

For the Hon'ble NCLT convened meeting regarding the scheme of reorganisation, the voting results showed that 99.44% of the non-promoter shareholders who voted, were in favour of the proposed restructuring (majority of minority requirement). Also, the requirement of obtaining creditors approval has been waived off by the Hon'ble 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.

As next steps, post filing of the shareholder meeting documentation, the company will approach Hon'ble NCLT for second motion petition to approve the scheme. Post the approval from Hon'ble NCLT, the company will work with the stock exchanges for listing of the securities. Listing is estimated to be completed by Q2FY21 subject to the receipt of the necessary approvals.

Once the proposed reorganisation is completed, two growth focused listed companies will emerge.

1) Motherson Sumi Wiring India Ltd. (MSWIL) will be the largest listed automotive wiring harness player in India with a nationwide manufacturing footprint. 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.

2) 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 now 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, HVAC etc in line with our 3CX10 strategy.

Commenting on this development, Mr Vivek Chaand Sehgal, Chairman, MSSL said "We thank our shareholders for their support and trust in the capabilities of Motherson. 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.

We would also like to take this moment to thank the front-line workers who are serving during the current wave of Covid-19. Our deepest sympathies are with the families who have lost their near ones in this battle. For us, the health and safety of our employees remain our topmost priority. We are doing our best under the circumstances to support our employees and their families."

Shares of MOTHERSON SUMI SYSTEMS LTD. was last trading in BSE at Rs.219.7 as compared to the previous close of Rs. 221.6. The total number of shares traded during the day was 361803 in over 3059 trades.

The stock hit an intraday high of Rs. 224.25 and intraday low of 218.55. The net turnover during the day was Rs. 79872141.

Source : Equity Bulls

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