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Mahindra shareholders okay plan to acquire Gujarat Tractors

The 52nd Annual General Meeting of Mahindra and Mahindra today approved the company's acquisition proposal of Gujarat Tractors Corporation Limited so that the management of M&M can make investment in equity shares of GTCL upto a maximum of 51 per cent.

The AGM also approved the resolutions related to buyback of the M&M shares by the promoters as allowed by the provisions of laws to be enacted by Parliament.

Addressing the shareholders, chairman Keshub Mahindra said that the company is currently under negotiations with the Gujarat government to take over the GTCL subject to the necessary statutory approvals. GTCL has a plant located at Baroda, manufacturing tractors in the range of 20 to 80 horse power under the brand name of Hindustan. The acquisition will enable M&M to supplement its various product range.

Expecting sustained growth in demand of tractors due to good monsoons and favourable government policy towards agricultural sector, Mahindra said that the sales volume of all tractors in the country were 81,600 in the first four months of the current year as compared to 80,699 tractors in the same period last year and of this, M&M continued to be the market leader at 26.5 per cent share.

During the period between April and August 1998, the company produced 24,585 and sold 22,749 vehicles as against 27,745 and 24,792 in the corresponding period last year. In farm equipment sector, it produced 19,806 and sold 23,541 tractors during the same period as against 26,873 and 25,202 units respectively in the corresponding period last year.

However, the growth in commercial vehicles continued to be severely hit by the lack of growth in the economy as the sales dropped by 47.3 per cent in the first four months of the current year.

UNI