Government to fully exit Maruti Udyog

Thursday, 21 December 2006, 06:00 Hrs
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New Delhi: The Indian government has decided to fully exit the Indo-Japanese car venture Maruti Udyog Ltd by selling its residual equity of 10.27 percent in the company

The decision was taken at a meeting of the Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Manmohan Singh here.

"The government will sell the remaining stake within this fiscal or the next," Finance Minister P. Chidambaram told reporters after the meeting. The stake will be sold to banks and financial institutions, he added.

Maruti Udyog had started as a 50:50 joint venture between the Indian government and Suzuki Motor Co of Japan. But the government started offloading its share of equity in the company on a piecemeal basis over the past four years.

While the majority state of 51 percent was handed over to Suzuki Motor Co in 2002, another 27 percent was divested by way of an initial public issue a year later. The government had sold eight percent stake to financial institutions.

Suzuki Motor Co currently holds a 54.2 percent stake in the venture.

Based on the current market price of Maruti Udyog shares, the government is expected to raise 270 billion ($600 million) by divesting its 10.27 percent stake. Bids for the stake sale will be invited soon, officials said.
Source: IANS
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