JAPAN’S KUBOTA CORP TO ACQUIRE ADDITIONAL 5.9% STAKE IN ESCORTS

NEW DELHI : Farm machinery major Escorts on Thursday said its Japanese partner Kubota Corporation will acquire an additional 5.9% stake in it for ₹1,872.74 crore, taking the total holding to 14.99% and becoming a joint promoter in the Indian firm.

The company will issue 93.64 lakh equity shares through a preferential issue to Kubota at an issue price of ₹2,000 per equity share, aggregating ₹1,872.74 crore, subject to shareholders’ and necessary regulatory approvals, the company said in a statement.

Kubota had 9.09% in Escorts and post the preferential allotment, its stake in the Indian partner will increase to 14.99%. “Kubota will also make an open offer to the public shareholders of Escorts to acquire up to 26% of the share capital in accordance with SEBI Regulations,” the statement said.

In a regulatory filing, the company said its board has also approved changing the name of the company from ‘Escorts Ltd’ to ‘Escorts Kubota Ltd’ or any other name containing the trade names ‘Escorts’ and ‘Kubota’ as may be approved by the Central Registration Centre, RoC and other regulatory authorities.As part of the agreement, Escorts and Kubota have decided to take necessary steps to evaluate and consider the feasibility of merger of Kubota’s subsidiaries in India, where Escorts is also a partner -- Kubota Agricultural Machinery India Pvt Ltd (KAI) and Escorts Kubota India Pvt Ltd -- into Escorts, subject to necessary approvals, it added.

Kubota Corporation will become a joint promoter along with the Escorts existing promoter Nanda family, who are not selling any shares of the company. The current promoters of the company hold a 36.59% stake in Escorts.

“With this Escorts is positioned to become an institution that will serve Indian and global farmers for decades and centuries,” Escorts chairman and managing director Nikhil Nanda said.