New Delhi, April 14 (IANS) Motherson Sumi has said that its Board of Directors have given an in-principal approval to raise up to Rs 1,000 crore to enhance liquidity amidst the coronavirus crisis.
In a statement, the company said that its Board has delegated its Committee of Directors to evaluate various borrowing proposals.
“To further enhance liquidity in these uncertain times, the Board of Directors has accorded in-principle approval to raise up to Rs 10 bn and delegated its Committee of Directors to evaluate and decide on various borrowing proposals. We are also proactively working to leverage on various government support schemes to enhance liquidity,” it said.
The company said that as its liquidity was “very strong” by the end of the financial year 2020.
As of March 31, 2020, consolidated cash of Samvardhana Motherson Automotive Systems Group BV stood at Rs 4,690 crore.
“We have adequate headroom in our bond documents to utilize the above and there are also no major maturities of debt in the next 12 months,” the company statement said.
Motherson’s Chairman Vivek Chaand Sehgal said: “Our team has done a phenomenal job in almost doubling MSSL’s turnover over the last 5 years to $9.6 billion/Rs 630 billion on an unaudited basis”
He noted that the company’s “aspirational” 5-year plans cannot be timed perfectly, and the unprecedented COVID-19 situation has hindered in closing of many target acquisitions.
“However, we believe that these same opportunities have become more attractive in valuations since the COVID crisis. Secondly, with our strong financial position and with customer faith intact, we are also being asked by many of our customers to look at more specific companies which are in trouble and we believe can be acquired at low valuations,” Sehgal added.
He said that the Motherson Sumi wanted to showcase its plans to the investors in June but keeping in mind the current environment, it would probably do so in October.
The company statement said that the coronavirus pandemic represents an unprecedented disruption to the global economy and world trade, as production and consumption are scaled back across the globe due to preventive directives from authorities world over.
“COVID-19 outbreak continues to grow in many areas of the world with severe toll on health. In light of this, Motherson has taken a holistic approach to protect the interest of various stakeholders including employees, customers, investors and societies where it is present,” it said.