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Maruti privatisation deal in final stages: Shourie

The government is close to finalising a deal to pass on majority control in the country's largest carmaker, Maruti Udyog Ltd, to joint venture partner Suzuki Motor Corp, the divestment minister said on Friday.

The Indian government, which holds a 49.74 per cent stake in the automaker, and Japan's Suzuki, which holds 50 per cent, are currently negotiating a price for transferring majority control to Japan's largest mini-car maker.

"We are at the final stages of the negotiations...tying up the loose ends...and a decision will be taken soon," Arun Shourie told reporters on the sidelines of an industry seminar. He said he could not give an exact time frame.

The government is aiming to reduce its stake in the automaker through a two-step process, beginning first with a Rs 4 billion rights issue.

In the second step, it is expected to renounce its portion of the rights to Suzuki -- in return for a control premium -- which the two are currently negotiating. The renunciation will boost Suzuki's shareholding in Maruti to over 50 per cent.

An employee trust holds the remaining 0.26 per cent.

Maruti, which began production in the mid-1980s, has a commanding 59 per cent share of the domestic market with its small, reasonably priced cars.

Shourie said Maruti's privatisation and that of another state-run firm, Indian Petrochemicals Corporation Ltd, will feature at the next meeting of the Cabinet Committee on Divestment that will be held after the current Parliament session.

The Budget session of Parliament ends on May 17.

The government, which holds a 59.75 per cent stake in IPCL, the nation's No 2 petrochemicals producer, plans to sell a 26 per cent controlling stake in the firm.

The government has successfully sold large chunks in several state firms in the telecoms and petroleum sectors to private and other bidders this year, as part of its privatisation drive.

It intends to raise Rs 120 billion through stake sales in the current year to March 2003.

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