Escorts shareholders sanction preference allotment of 9.4 million shares to Japan's Kubota

According to BSE filing on Monday, shareholders of agricultural machinery and construction equipment  Escorts Ltd have approved a preferential allotment of about 94 lakh shares to Japan's Kubota Corporation, seeking majority control over its Indian partner and joint venture. Escorts filed that the shareholders agreed to change the company name to Escorts Kubota Limited or to other names such as Escorts and Kubota, as approved by the authorities.

In addition, the members agreed to increase the maximum number of directors to be appointed to the board to 18.

The development follows a deal last month to buy an additional 5.9 percent stake in Kubota Escorts for ₹ 1,872.74 crores, paving the way for the Japanese partner to become a majority shareholder in the 54-55 percent range. Invest approx. An additional ₹ 10,000 crore can be made, including an open offer to public shareholders for a 26 percent stake.

The shareholders approved the Letter of Offer on the basis of a special offer for the issuance of 93,63,726 equity shares of Escorts Company and a preferential allotment to Kubota with 99.99% of the vote.

The special resolutions approving the change of name of the company and its transformation into the Association of Associations were passed with 99.99 percent and 98.75 percent votes respectively.

The company also said that the special resolution to increase the number of directors to 18 was approved by the shareholders with 99.47 percent votes.

Escorts currently has 12 directors on its board. Escorts said the general resolution approving party affairs with Kubota was also passed with 99.99 percent of the vote.

Proxy advisory firm Stakeholders Empowerment Services advised shareholders to vote against Kubota's preference allotment, change the company name and articles of the association, and increase the number of board members, as the Japanese company does not pay premiums for escorts shares.

Corporation, seeking majority control over its Indian partner and joint venture. Escorts filed that the shareholders agreed to change the company name to Escorts Kubota Limited or to other names such as Escorts and Kubota, as approved by the authorities.