Govt to exit from Maruti

New Delhi, Dec 21 (UNI) The government today decided to offload its remaining 10.27 per cent equity stake in Maruti Udyog Limited (MUL), India's largest car maker, thus finally exiting from the joint venture with Japan's Suzuki Motors Corporation.

The proposal to divest government's residual share in MUL was cleared by the Cabinet Committee on Economic Affairs, Finance Minister P Chidambaram told reporters here.

The sale of government's remaining 2,96,79,689 shares (as on September 31, 2006) in Maruti, the second such exercise this year, is expected to fetch more than Rs 2,700 crore at the current market price.

The stake will be sold to banks and financial institutions and bids are expected soon. Indian mutual funds would also be eligible to take part, Mr Chidambaram said.

No details were given on when the sale would take place.

SBI Capital Markets and Kotak Mahindra Capital Company Ltd. have been appointed as advisors.

In the divestment done early this year, the government had offloaded 8 per cent of its equity in the company, mopping up Rs 1,567 crore from the sale at an average price of Rs 678.24 a share.

Maruti was an equal joint venture between the government and Suzuki, which owns 54.2 per cent equity worth more than 3 bilLion dollars, when the previous coalition government began diluting its stake as part of its efforts to exit from non-core sectors.

The ruling Congress-led UPA coalition put all decisions to sell stakes in PSUs on hold in July after the CPI (M) threatened to pull out.

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