Suzuki to transfer Gujarat unit to Maruti if pact expires

Written by ENS Economic Bureau | New Delhi | Updated: Feb 27 2014, 23:48pm hrs
Maruti Suzuki IndiaThe company has clarified that Suzuki Motor Corporation?s subsidiary in Gujarat. Reuters
In an attempt to allay concerns raised by its investors, Maruti Suzuki India (MSIL) on Wednesday clarified that the Gujarat manufacturing facility will be transferred to MSIL in case of expiry of the manufacturing agreement.

If the contract manufacturing agreement expires, and in case is not extended by mutual consent, the assets of the Gujarat subsidiary would be transferred to MSIL at a fair value to be determined by independent valuation, said MSIL. The investors have raised concerns over Suzuki Motor Corporations plan to build the Gujarat facility, which was earlier planned to be built by MSIL. The investors were also planning to move Sebi with the complaining.

The company has clarified that Suzuki Motor Corporations subsidiary in Gujarat would operate on the basis that while it would not make any losses, it would also not accumulate any cash surpluses.