Board of Motherson Sumi Systems approves group reorganization plan

At meeting held on 02 July 2020

The Board of Directors of Motherson Sumi Systems at its meeting held on 02 July 2020 has approved a group reorganization plan with the objective of creating value for the shareholders of MSSL.

The reorganization realigns interests of all its stakeholders and creates a simplified corporate structure for growth of businesses across product portfolios within auto components space and allied operations.

The reorganization plan approved by the respective boards of MSSL and Samvardhana Motherson International (SAMIL) among other things, entails demerger of Domestic Wiring Harness (DWH) business from MSSL into a new company which is in the process of being incorporated as a wholly owned subsidiary of MSSL (New Co.) and subsequent merger of SAMIL into MSSL to consolidate 100% shareholding in Samvardhana Motherson Automotive Systems Group BV (SMRP BV) as well as to bring all auto component and allied businesses in SAMIL under MSSL.

The proposed reorganization aims to:

Simplify Group structure and enable MSSL shareholders to benefit through 100% 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

To give effect to the proposed reorganization, the Board of Directors of MSSL in its meeting approved the following (Transaction):

Step 1: Demerger of DWH business of the Company into New Co., which will eventually be listed, with mirror shareholding as that of the Company
For every 1 share held in MSSL, 1 share of New Co. would be allotted

Step 2: The Board also approved the merger of SAMIL, the principal holding company of Motherson Group and promoter of MSSL, into MSSL
For every 10 shares held in SAMIL (of face value Rs. 10/- each), 51 shares of MSSL (of face value Re. 1/- each) would be allotted
MSSL will be renamed as Samvardhana Motherson International.

The Transaction is to be effected pursuant to a Composite Scheme of Amalgamation and Arrangement (Scheme) and is subject to receipt of regulatory and other approvals inter-alia approval from shareholders, creditors, NCLT etc. as may be applicable. The Transaction is likely to be completed by Q2FY22.

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