India`s Maruti Suzuki approves issue of shares to parent Suzuki Motor Corp
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India's Maruti Suzuki on Tuesday said it had approved an issue of equity shares to its parent Suzuki Motor Corporation to pay for the Gujarat plant it will buy from its Japanese parent.
The plant was last valued at a book value of 127.55 billion rupees ($1.54 billion), the country's top automaker by volume said last week. Details of the actual deal value, including the issue price and number of shares, will be set in a subsequent board meeting, the company said on Tuesday.
The move to allot preferential shares to Suzuki was taken as it was "the most beneficial option for minority shareholders and the company," Maruti said in a statement.
Maruti's purchase of the plant from Suzuki, announced last week, gives it a better grip of production, including that of electric vehicles and will help it to make necessary changes as per the demand, chairman RC Bhargava had said.
Suzuki Motor Corp's shareholding in Maruti Suzuki will increase by around 4% following the transaction, a Mumbai-based analyst estimated.
Shares of Maruti Suzuki have fallen about 2.5% since reporting quarterly earnings on July 31.
($1 = 82.7950 Indian rupees)
