Mahindra & Mahindra to divest 8.09 per cent stake in Mahindra Holidays
15 September 2011
India's largest utility vehicles maker, Mahindra & Mahindra (M&M), said in a statement to the BSE today that its board had approved divestment of up to 8.09 per cent stake held in Mahindra Holidays & Resorts India Ltd.
Mahindra & Mahindra which currently holds 83.09 per cent of the equity share capital of Mahindra Holidays & Resorts India Ltd ("MHRIL"), a listed subsidiary of the company, plans to divest 8.09 per cent stake via open market operations by June 2013.
In an interview with ET Now, Arun Nanda, chairman, Mahindra Holidays said the company was planning the divestment with a view to comply with SEBI norms and did not have any cash shortages.
He said the additional cash from the stake sale which would happen via small lots would go to parent M&M. He added, after dilution, M&M might not look at divesting from its stake of 75 per cent stake in Mahindra Holidays.
The company's decision to dilute is pursuant to the Listing Agreement and the Securities Contracts (Regulation) Rules, 1957, under which listed companies with less than 25 per cent public shareholding are required to reach this minimum threshold of 25 per cent within a period of three years from the date of commencement of the Securities Contracts (Regulation) (Amendment) Rules, 2010, that is, by June 2013.