Chinese automaker SAIC-owned MG Motor is reportedly planning to sell its majority stake in India car business. MG Motor India is in talks with multiple brands for equity sales. The discussions are with brands like Reliance Industries, Hero Group, Premji Invest and JSW Group.
The report claims that discussions are on with the Indian companies and MG Motor is aiming to finalise the deal by the end of this year. The talks are in advanced stage as MG wants funds immediately to kick off the next phase of expansion. However, MG Motor India has said that the talks with Reliance, Hero Group, Premji Invest and JSW are mere speculations.
Due to India-China border tensions, companies with Chinese connections are facing roadblocks in getting approvals for fresh investments. In fact, MG Motor India is reportedly awaiting government approval for around two years to raise funds from its parent company – SAIC. The company is now looking for other options to raise the capital to begin next phase of products.
MG Motor India CEO Rajeev Chaba said that the company aims to “Indianise operation” by diluting majority stake to financial institutions, partners & high net-worth locals. Speaking to ET, Rajeev Chaba said “We intend to Indianise shareholding, the company’s board, management, supply chain in the next two-four years.”
MG Motor India plans to raise around Rs 5000 crore capital by selling majority stake to local partners & investors. The new investments will be used to fund next round of its growth in the country. MG Motor currently rolls out product from its manufacturing facility in Halol, Gujarat that has a production capacity of 1.2 lakh cars per year. The company is aiming to set up a new facility to increase production to 3 lakh units per annum. The company is planning to launch 4-5 new cars in the country over the period of next 2-4 years.
Source – ET Auto