NEW DELHI: MG Motor
is ready to give up majority shareholding in India car business and is
in “advanced negotiations” for equity sale with a clutch of suitors,
that include Reliance Industries, Hero Group, Premji Invest and JSW
Group, sources have said.
The move by MG, a British car brand owned by Chinese auto giant SAIC,
aims to get regulatory ease in India as the company faces difficulties
in getting approvals for fresh investments from its parent due to
restrictions following IndoChina tensions. Through the entry of
wellheeled and trusted local partners, the company looks to embark on
its next phase of growth, where it needs investments of Rs 5,000 crore
to set up a factory in Gujarat and drive in new cars — most of them will
be electric.
“Hectic discussions are on with the Indian companies
and MG Motor is looking to close a deal by the end of this year,” one of
the sources said, adding talks are at an “advanced stage”, especially
as MG wants funds “almost immediately” to kick off the next phase of
expansion. “Negotiations are on and the effort of MG management is to
get a credible partner, while managing attractive valuations."
MG Motor India termed questions around the talks with Reliance, Hero
Group, Premji Invest and JSW as “speculative”. Detailed questionnaires
sent individually to the Indian companies remained unanswered at the
time of going to the press.
MG Motor India CEO Rajeev Chaba refused
to answer questions around potential suitors and talks with them.
However, he said the company is planning an aggressive investment plan
as part of a fiveyear business road map. “This will see the company
invest Rs 5,000 crore by 2028, increase production from 1.2 lakh units
annually to 3 lakh units, drive in four to five new cars, work on
battery assembly units within the Gujarat plant and explore cell
manufacturing and hydrogen fuelcell technologies through joint ventures
and thirdparty manufacturing.”
The company, which sells models such
as the Hector and Gloster SUVs and ZS and Comet electrics, also wants
to boost localisation on products, while planning to increase employment
by about 20,000 (direct and indirect) by 2028.
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