M & M To Sell 40% In Ill To Mannesmann

Mahindra & Mahindra Ltd is shedding its 40 per cent equity holding in Bangalore-based International Instruments Ltd (IIL), in favour of Mannesmann VDO AG, Germany, making the German group the absolute owner of IIL.

The acquiring of further 40 per cent equity shares of the International Instruments Ltd, which makes Yenkay brand automotive components, from Mahindra & Mahindra Ltd, will increase VDOs equity holding to 80 per cent.

Consequently, International Instruments Ltd, which makes Yenkay brand automotive components, will be changed into VDO India Ltd, signifying the transfer of the company fully into the hands of Mannesmann VDO AG, Germany. This move will make the IIL to be identified with VDO group worldwide. The company is now in the process of obtaining necessary approvals from the government.

 

IIL is holding an extraordinary general meeting (EGM) on 13th March for seeking shareholders approval for the change of name by moving a special resolution under Section 21 of the Companies Act, 1956.

Only last year, IIL had increased its authorised equity share capital from Rs five crore to Rs 5.5 crore by the addition of five lakh equity shares of Rs 10 each.

The company had also issued nine lakh equity shares aggregating to the value of Rs 90 lakh for subscription by financial institutions by conversion of Rs 90 lakh out of the loan amount due to them into equity shares at par.

This was done by offering 4.5 lakh equity shares of Rs 45 lakh to ICICI Ltd at par and offering equal shares to Industrial Investment Bank of India Ltd.

M & M is now being represented at the IIL board by A K Nanda as a director.

Last year, the company had posted an increase of 30 per cent in its turnover amounting to Rs 49.5 crore for the year ended March 31, 1997. Eventhough the companys turnover had increased, the margings have been under pressure due to product mix and increase in costs. This had resulted in an insignificant rise in profit from Rs 4.35 crore in previous year to Rs 4.38 crore during 1996-97.

VDO Adolf Schindling AG, Germany, a group company from VDO, was already assisting IIL in export front. It has entered into a technical collaboration with VDO Adolf Schindling, for making new products to be used on the new generation of cars manufactured in India. It is in the process of absorbing technology for the manufacture of the state-of-the-art Flach-tacho and electral gauges. IIL is also working on its modernisation step.