M&M announces investment in associate company

Mahindra & Mahindra said that the company's board of directors subscribed to 288 Compulsorily Convertible Preference Shares (CCPS) of Sampo Rosenlew Oy, Finland, an associate of the company.

Pursuant to this transaction, the voting rights of the company in Sampo would increase from 49.04% to upto 49.14%, Mahindra & Mahindra said. The anouncement was made after market hours yesterday, 23 April 2020.

Shares of M&M rose 2.12% to settle at Rs 347.55 yesterday, 23 April 2020.

The investment is intended to consolidate presence in combine harvesters in the global markets, which is in furtherance to the main line of business of the company, M&M said. Total acquisition cost is Euro 28,79,712 (288 CCPS at Euro 9,999 per CCPS) [equivalent to around Rs. 23.61 crore at the foreign exchange rate of Rs. 82 per Euro].

The CCPS are convertible into equity at the option of the company from the date of making the investment upto 16 December 2028 and would be compulsorily converted into equity on 16 December 2028 based on Fair Market Value on the date of conversion.

Sampo Rosenlew Oy, Finland, an Associate of the Company (Sampo) is a leading player in combine harvesters' market. Sampo was founded in 1853 and is based out of Pori, Finland. Sampo is a manufacturer of combine harvesters and forest machinery with market presence in Europe, CIS and Algeria.

Sampo had a total revenue of Euro 75 million during the 18 months ending 31 March 2019. Post-acquisition of CCPS, Sampo would continue to remain an Associate of the Company.

Seperately, Mahindra & Mahindra (M&M) said that the Loans & Investment Committee has approved issuance and offer of 6.78%, 10,000 nos. of Rated, Listed, Unsecured, Redeemable Non-convertible Debentures of Rs 10 lakh each aggregating Rs 1,000 crore for cash at par, (NCDs) on private placement basis.

M&M's segments include automotive, farm equipment, financial services, real estate, hospitality and others. Automotive segment comprises of sale of automobiles, spares, mobility solutions and construction equipment. Its farm equipment segment comprises of sale of tractors, implements and spares.

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