MAHINDRA & MAHINDRA LTD. | Integrated Annual Report 2022-23

61 COMPANY OVERVIEW BOARD’S REPORT MANAGEMENT DISCUSSION AND ANALYSIS CORPORATE GOVERNANCE BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT STANDALONE ACCOUNTS CONSOLIDATED ACCOUNTS MEAL in two or more tranches. BII would invest in the form of Compulsory Convertible Preference Shares (“CCPS”) at a valuation of upto Rs. 70,070 crores, resulting in 2.75% to 4.76% ownership for BII in MEAL. The said investment by BII also envisages BII having a nominal shareholding of 100 Equity Shares in MEAL. Part of the investment by BII in CCPS of MEAL was completed during the financial year. Acquiring balance stake in Sampo Rosenlew Oy, Finland (“Sampo”) During the year, your Company exercised the Call Option and entered into the Share Purchase Agreement to acquire the balance 1,317 Equity Shares of Sampo at a price of Euro 3,333 per share from other shareholders, increasing the equity stake of the Company in Sampo from 79.13% to 100%. Consequently, Sampo has become a wholly owned subsidiary of the Company. Induction of OTPP, the financial partner in Renewables Business During the year, Mahindra Holdings Limited (“MHL”), a wholly owned subsidiary of your Company, and Mahindra Susten Private Limited (“MSPL”), a wholly owned subsidiary of MHL and of your Company entered into a Share Purchase Agreement and Shareholders’ Agreement with 2452991 Ontario Limited (“2OL”), a wholly owned subsidiary of Ontario Teachers’ Pension Plan Board (“OTPP”) for the sale of 30% stake in MSPL by MHL to 2OL, with an option for an additional 9.99% stake sale in MSPL by MHL to 2OL or any other investor. The agreement also envisages the formation of an Infrastructure Investment Trust (“InvIT”) through a series of transactions, subject to applicable laws and regulations, having MSPL and 2OL or any of its affiliates (Ontario Teachers’) as Sponsors. The InvIT shall own identified operational renewable assets. The transaction will enable your Company to unlock value in the Renewable Energy Sector and it will continue to invest along with Ontario Teachers’ to help realise its twin objectives of accelerated growth and global leadership in ESG. The first stage of the transaction entailing the sale of 30% stake in MSPL was completed during the financial year. SsangYong Motor Company (SYMC) As mentioned in the previous Annual Report, post termination of Investment Agreement executed with Edison Motor Consortium pursuant to Court Receivership process as per the provisions of Korean Debtor Rehabilitation and Bankruptcy Act, SYMC initiated a process to invite new investor(s). During the year, Seoul Bankruptcy Court approved a rehabilitation plan reflecting the Investment Agreement between the KG consortium, led by South Korea based conglomerate KG Group and SYMC. KG consortium acquired a stake of 80.50% in debt-ridden SYMC for KRW 930 billion in one or more tranches. The Company’s ownership and outstanding dues in SYMC were restructured as part of the rehabilitation plan. The Company received cash payment of approximately KRW 10.2 billion and the shareholding of the Company stands reduced to approximately 5.2% post the completion of all tranches by KG Group. Divestment of stake in CIE Automotive India Limited (“CIE”) On 27 th September, 2022, your Company sold 82,42,444 equity shares at a gross price of Rs. 285 per share representing 2.173% of the paid-up share capital of CIE, a listed associate of the Company. Thereafter, on 13 th March, 2023, your Company further sold 2,29,80,000 equity shares at a gross price of Rs. 357.39 per share representing 6.058% of the paid-up share capital of CIE. Following the aforesaid sale of shares, the shareholding of the Company in CIE has come down from 9.253% to 3.195% of its share capital. Subsequent to the year end, the Company sold the balance 3.195% equity stake in CIE comprising of 1,21,22,068 equity shares at a gross price of Rs. 447.6501 per share and the Company’s shareholding in CIE has become Nil. Divestment of stake in Peugeot Motocycles S A S. (“PMTC”) During the year, Mahindra Two Wheelers Europe Holdings S.a.r.l. (“MTWEH”), a wholly owned subsidiary of the Company, Peugeot Motocycles S.A.S. (“PMTC”) and Purple Holding (a wholly owned subsidiary of Mutares Holding-56 GmbH) executed an Irrevocable Offer and as a part of the said Offer, inter alia agreed to: ● Conversion of existing 3,12,085 ordinary shares held by MTWEH in PMTC to 3,12,085 “Preferred Shares A” whereby the existing 100% shareholding and voting rights of MTWEH in PMTC stand reduced to 50% in terms of shareholding and 19.99% in terms of voting rights. ● Investment by MTWEH in PMTC in the form of subscription to Bonds redeemable into “Preferred Shares A” of PMTC i.e. “Obligations Remboursables en Actions de Préférence A” known as “ORA”.