Shareholders Okay M & M Move To Hive Off Unit

Prior to moving the resolution to this effect, the chairman of M&M, Keshub Mahindra, told shareholders, the company is focusing on its core areas of automotive and farm equipment, and in line with this strategy is getting out of this unrelated business.

Transferring the unit to a new company will also benefit the ash handling systems business and future investments can be sought, he added.

The unit, located at Sewri in Mumbai, is part of the MSL Division which M&M had acquired by virtue of the amalgamation of the erstwhile Mahindra Spicer with the company in 1984. The unit is engaged in the business of design, fabrication, assembly and erection of ash handling systems, travelling waterscreens and allied equipments for the power sector.

 

The transfer of the unit will be decided on the basis of a valuation report from merchant bankers. According to the resolution, a part of the consideration for the transfer of the unit may be received by the company in the form of allotment of equity shares.

The chairman, however, had to face unhappy shareholders asking for a better dividend than the 45 per cent awarded for 1995-96. Answering some agitated shareholders Mahindra said, the company believes in a conservative approach of offering steady dividends and last year it had offered a higher dividend since it was entering the golden jubilee year.

Commenting on the Mahindra-Ford passenger car project, he said that the job one of Escort will roll out of the Nashik factory on August 26. Mahindra-Ford's Escort, the latest entrants in the mid-size passenger cars segment, will be positioned against the Cielo of DCM Daewoo, according to Mahindra. The car will be priced in the range of Rs 6.5 to 7 lakh, he said.