Agreement Details
The Company has executed an Agreement with Kaga Electronics India Private Limited (Kaga) to establish, develop and operate a technologically advanced, state of the art EMS manufacturing facility together in India focusing on Japanese clients.
Investment Structure and Ownership
Pursuant to the Agreement, the Company shall invest for an aggregate ownership stake of up to 60% in the Joint Venture Company (JVCo), to be incorporated. Kaga shall invest for an ownership stake of up to 40% in the JVCo. The Proposed Transaction is subject to customary conditions precedent and closing conditions as set out in the Agreement.
Financial Investment Details
The equity shares will be subscribed in the JVCo as follows:
- By the Company for an aggregate amount of approximately INR 15 crore
- By Kaga for an aggregate amount of INR 10 crore
The issuance of further shares shall be undertaken at fair market value, determined as per the terms of the Agreement in accordance with a valuation report as per applicable laws.
Governance Structure
The Board of Directors of the JVCo shall comprise 4 (Four) directors as follows:
- 2 (Two) directors nominated by the Company
- 2 (Two) directors nominated by Kaga
Significant Terms and Rights
The Agreement provides for customary rights and restrictions for a joint venture, including:
- Share transfer rights and restrictions, including right of first refusal of the Company/Kaga in case of transfers of equity shares of the JVCo by the other party
- Reserved matter rights for both Syrma and Kaga in relation to certain identified matters
- Provisions relating to future funding of the JVCo, including rights issue
- Fall away rights
Related Party Status
The parties are not related to promoter/promoter group/group companies in any manner. The transaction does not fall within related party transactions.
Additional Information
No potential conflict of interest arising out of such agreements disclosed. No termination or amendment of agreement at this stage.