Syrma SGS Technology Limited has entered into an agreement with Kaga Electronics India Private Limited to establish, develop and operate an electronics manufacturing services facility in India through a joint venture. The joint venture company will focus on serving Japanese clients.
Syrma SGS will hold a 60% ownership stake in the proposed joint venture company, while Kaga Electronics will own the remaining 40%. Syrma SGS will invest approximately Rs 15 crore and Kaga Electronics will invest Rs 10 crore in the JVCo as part of the initial equity subscription.
The board of the joint venture will comprise four directors, with two nominated by each company. The agreement includes share transfer rights and restrictions, including a right of first refusal for either party in case of equity share transfers. Both Syrma SGS and Kaga hold reserved matter rights on certain identified matters. The agreement outlines provisions for future funding of the JVCo including rights issues.
The proposed transaction is subject to customary conditions precedent and closing conditions as set out in the agreement. The issuance of further shares beyond the initial investment will be at fair market value determined through a valuation report under applicable laws.
Neither Syrma SGS nor Kaga Electronics are related to each other's promoter or promoter group. The transaction does not fall within related party transactions and is conducted at arm's length.
Disclaimer: This article is based on company filings submitted to the Bombay Stock Exchange (BSE) and National Stock Exchange of India (NSE) and is for informational purposes only. It does not constitute investment advice or a recommendation. Investors should conduct their own research and consult a qualified financial advisor before making investment decisions.