BMW
TO HIKE STAKE IN INDIAN ARM TO 100%
The government
has cleared a proposal by BMW AG and BMW Holdings to acquire
30% stake of the two partners in its Indian subsidiary BMW
India. The stake was held by Ravindra Nath and Satish Kumar
Narula.
Following the deal,
BMW India would become a 100% subsidiary of BMW AG. BMW is
also investing Rs 100 crore in the company by way of acquisition
of the existing shares and by way of subscribing to the equity
of the company.
As per the new plan, it would undertake assembly of automobiles
using completely knocked down (CKD) car parts and kits imported
from overseas. Besides, it would also import completely built-up
units (CBU) of certain models from BMW AG. BMW India will
set up its new facility at Chenglepet in Tamil Nadu.
Here is how the
transaction is being carried out by BMW AG and BMW Holdings.
BMW AG is acquiring 3,00,00,000 shares of Rs 10 each of BMW
India, representing 30% of BMW India's paid-up share capital.
It would be done in the following manner. It will first purchase
2,990 equity shares and 10 equity shares of Rs 10 each of
BMW India from Mr. R a v i n d e r Nath and Mr Satish Kumar
Narula respectively, at a face value of Rs 10 per share. Besides
it would also subscribe to 2,99,97,000 shares of Rs 10 each
of BMW India at a face value of Rs 10 per share.
BMW Holdings on
its part would acquire 7,00,00,000 shares of Rs 10 each of
BMW India, representing 70% of BMW India's paidup share capital.
This would be done by purchasing 7,000 equity shares of Rs
10 each of BMW India from Mr Ravinder Nath, at a face value
of Rs 10 per share. It would also acquire 6,99,93,000 shares
of Rs 10 each of BMW India at a face value of Rs 10 per share.
Apart from assembly
and import of CBUs, BMW India would also source components
and accessories from its global operations. Besides, it would
also market, distribute and sell these automobiles in India
and overseas, through distributors and dealers. BMW India
was incorporated on August 26, 1997 with a paid-up capital
of Rs 1 lakh subscribed in the ratio of 99.9% numbering 9,990
shares by Ravinder Nath and 0.1% numbering 10 shares by Satish
Kumar Narula. BMW AG had later invested Rs 61.20 crore in
BMW India for a 51 % stake. It was allowed royalty payment
at the rate of 5% both on internal sales and exports for a
period of five years. It had then entered into a joint venture
with Hero Cycles Ltd and Munjal Brothers Private Ltd.
