Samvardhana Motherson’s branch makes deals with BIEL Crystal, opening up more opportunities for technology and investment.

In a recent development, Samvardhana Motherson Innovative Solutions (SMISL), a subsidiary of auto parts market leader Samvardhana Motherson International Ltd, has inked several crucial agreements with BIEL Crystal (Singapore) Pvt Ltd. With a strategic focus on advancing technology and investment opportunities, these agreements are set to shape the future of the company and pave the way for exciting prospects. Collectively referred to as the “Definitive Agreements,” these pacts include a Securities Subscription Agreement, Shareholders Agreement, and Technology Support Agreement.

Investment and Shareholding Agreement to Drive Growth

Samvardhana Motherson
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Under the terms of the agreements, BIEL Crystal will be making a significant investment in Motherson Electronic Components Private Limited (MECPL), a wholly owned subsidiary of SMISL. This investment will be made through 0.01% compulsorily convertible preference shares (CCPS), which have the potential to be converted to a 10% equity stake initially, with further potential to increase up to 49% on a fully-diluted basis. This infusion of capital will provide MECPL with the necessary financial resources to propel its growth and expansion plans.

Technological Expertise and Support for Enhanced Capabilities

In addition to the financial investment, BIEL Crystal and its affiliates will extend valuable technical assistance to MECPL. This not only strengthens the partnership but also ensures a valuable knowledge exchange. By sharing their technological expertise, BIEL Crystal aims to contribute to the enhancement of MECPL’s capabilities in the industry. Such collaboration of resources and support promises substantial growth potential for MECPL and reinforces its position as a technology-driven player in the market.

Ensuring Balance and Representation

The agreements also outline the governance structure of MECPL. SMISL, as the parent company, retains the right to appoint a majority of directors to the board of MECPL. On the other hand, BIEL Crystal, based on its shareholding, possesses the right to nominate directors as well. These rights are defined based on the percentage of shareholding, with one director for less than 26%, two directors for 26%-40%, and one director for 40%-49%, excluding the nominees from SMISL. This balanced representation ensures that both parties have a say in the decision-making process and fosters a collaborative environment for sustainable growth.

 

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Commitment to Maintain Shareholding Ratio

To preserve the agreed-upon shareholding ratio, MECPL must uphold its fully-diluted basis consistently. This ratio holds significance for current and future financing endeavors. Any failure on the part of MECPL to subscribe to future funding will lead to dilution, highlighting the importance of upholding financial commitments. This commitment ensures a stable structure for growth, capital infusion, and a mutually beneficial partnership between SMISL and BIEL Crystal.

Growing Footprint and Expanding Possibilities

Samvardhana Motherson International Ltd has been vigorously expanding its global presence, and the recent inauguration of its wiring harness facility in Ras Al Khaimah (RAK), UAE, exemplifies its commitment to growth. Located within the Ras Al Khaimah Economic Zone (RAKEZ), the facility strategically positions SMISL to cater to the booming demand in the region and capitalize on emerging opportunities. With its strengthened partnership with BIEL Crystal, SMISL is poised to leverage technological advancements and innovative solutions to reinforce its market leadership in the auto parts sector.

 

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This collaboration with BIEL Crystal emphasizes Samvardhana Motherson’s commitment to fostering mutually beneficial relationships, driving innovation, and strengthening its position as a global leader in the industry. These agreements serve as a testament to the company’s dedication and vision in shaping the future of the automotive sector, while simultaneously creating value for its stakeholders.

 

Source:cnbctv18.com

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