Auto component major Motherson Sumi Systems (MSSL) on Thursday said it has approved a group reorganisation plan that will create a simplified corporate structure to help businesses grow across product portfolios within the auto components space and allied operations, the firm said.
The reorganisation plan, approved by the respective boards of MSSL and Samvardhana Motherson International (SAMIL), among other things, entails a demerger of the domestic wiring harness (DWH) business from MSSL into a new company that is in the process of being incorporated as a wholly-owned subsidiary of MSSL. It also includes the subsequent merger of SAMIL into MSSL to consolidate 100 per cent shareholding in Samvardhana Motherson Automotive Systems Group BV (SMRP BV), and bring all auto component and allied businesses in SAMIL under MSSL.
“The proposed reorganisation aims to simplify group structure and enable MSSL shareholders to benefit through 100 per cent 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; create strong platforms for growth,” the firm said. The MSSL board on Thursday approved the demerger of the DWH business into a new firm, which will eventually be listed.
For every one share held in MSSL, one share would be allotted in the new firm.
The board also approved the merger of SAMIL, the holding company of Motherson Group and promoter of MSSL, into MSSL. For every 10 shares held in SAMIL (with face value of Rs 10 each), 51 shares of MSSL (with face value Rs 1 each) would be allotted. MSSL will be renamed as Samvardhana Motherson International.