Escorts shareholders approve preferential allocation of 94 lakh shares to Japanese Kubota
Shareholders of the large agricultural machinery and construction equipment company Escorts Ltd have approved the preferential allotment of nearly 94 lakh of shares to the Japanese company Kubota Corporation, which seeks to take majority control of the Indian partner and to become a joint promoter, according to a BSE file released on Monday.
Shareholders also approved the change of the company’s name to Escorts Kubota Ltd or any other name containing the Escorts and Kubota trade names approved by authorities, according to the Escorts file.
In addition, members agreed to increase the maximum number of directors who can be appointed to the board to 18, he added.
The development follows last month’s deal whereby Kubota will acquire an additional 5.9% stake in Escorts for 1,872.74 crore, paving the way for the Japanese partner to become a majority shareholder of 54 to 55 crore. % for which he could invest nearly 10,000 crore, including an offer open to public shareholders for an additional 26% stake.
The special resolution to issue 93 63,726 shares of the company on a preferential grant basis to Kubota and the issuance of a letter of offer were approved by the shareholders with 99.99% of the votes in favor, a declared Escorts.
Special resolutions to approve the name change of the company and the amendment of the articles of association were approved with respectively 99.99 percent and 98.75 percent of the votes in favor, he added.
The company further said that its special resolution to increase the limit on the number of directors to 18 also received shareholder approval with 99.47 percent of the votes in favor.
Escorts currently has 12 directors on its board. An ordinary resolution to approve related party transactions with Kubota was also passed with 99.99% of the vote in favor, Escorts added.
Proxy advisory firm Stakeholders Empowerment Services had advised shareholders of the company to vote against the preferential allocation to Kubota, the change of the company name and the amendment of the articles of association and the increase in the number of members of the board of administration claiming that the Japanese company paid no premium for Escorts shares.