The Hindu : Business : Firodias to stay invested in Bajaj Auto

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Wednesday, Mar 16, 2005

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Business

Firodias to stay invested in Bajaj Auto

By Our Staff Correspondent

MUMBAI, MARCH 15. The Firodias have decided to stay invested in Bajaj Auto Ltd. (BAL) considering that this investment has been historically a good investment since the formation of BAL. "There is no reason for the Firodia family to change its opinion today," said Abhay Firodia, Chairman and Managing Director, Bajaj Tempo Ltd. (BTL) in a statement issued today.

The Firodias have also decided not to attempt purchase of shares in BTL held by the Bajaj Group or from any other person as the present promoters' holding is sufficient. In the light of this decision by the Firodia family, the question of valuation of BTL shares does not arise.

BTL is pursuing plans to manufacture heavy commercial vehicles (HCVs), new technology engines and vehicle aggregates at a cost of Rs. 350 crores. BTL is nearly debt free and is in a position to access the required resources without inducting a foreign equity partner. The expansion plans are being implemented at BTL's plant at Pithampur, near Indore in Madhya Pradesh, and there are no plans to set up a new independent facility. The project is to be completed by the end of the current calendar year.

Reiterating the point that MAN Nutzfahrzeuge, the German auto giant, is a technical collaborator and not an equity partner in the project, Mr. Firodia said, "BTL has no proposals or plans to induct MAN as equity partners. There have been no discussions or negotiations in this regard. The question of percentage of stake or the method of allotment by preferential allotment to MAN does not arise."

Also, as per the directive received from the Regional Director, Western Region, Ministry of Company Affairs, Mumbai, the company has proposed to change its name to `Force Motors Ltd.' As per the Companies Act, it is mandated that the change in name should be carried out by an ordinary resolution. The approval of an ordinary resolution requires only a simple majority and extraordinary general meeting is to be held at Akurdi, Pune on April 5.

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