JSW Chairman Sajjan Jindal, SAIC finalise terms to buy stake in MG Motor India: Report

JSW Group Chairman Sajjan Jindal and Shanghai-based SAIC Motor Corp had reportedly ended months of negotiations and finalised the terms of their agreement for a grand alliance involving MG Motor India. The valuation of MG Motor India could touch $1 billion. A formal announcement is expected soon, by Diwali. 

The new alliance would roll out electric cars under the new aegis by January 2024, according to a report in The Economic Times. The agreement, it stated, would be implemented in several phases, at the end of which MG Motor would cease to be a Chinese company. 

In the first phase, a Jindal company would own 32-35 per cent of MG Motor India, with SAIC owning 51 per cent. An unknown Indian financial institution would own 8 per cent, while Indian dealers of MG and its local employees will own 6-7 per cent. The losses accumulated will be written off against the equity capital of SAIC.

Following that, MG Motor India will launch its IPO as an offer for sale (OFS), in which SAIC would sell its stock bringing down the Chinese ownership to around 38-40 per cent. Over time Sajjan Jindal’s ownership will go up to 49 per cent and eventually to 51 per cent, stated the report. 

With Chinese ownership below 49 per cent, MG Motor will not remain a Chinese company, The board and management will also have majority Indian representation, stated the report. The company will appoint a new CEO for the venture that will have a new brand identity too. 

MG India MD Rajeev Chaba met JSW top brass recently to finalise the terms of the agreement, it stated. 

The new alliance will continue to pay royalty to SAIC till the local company develops its own IP and software, the report added. 

MG Motor has a market share of 1.26 per cent in the passenger vehicle segment in India. The company has sold around 170,000 units in India. In March it recorded its highest sale of 6,051 vehicles. It has a manufacturing facility in Gujarat’s Halol, with an annual production capacity of 120,000 units. 

Also read: JSW’s Sajjan Jindal may acquire up to 48% in MG Motor India; turn it into an Indian entity

Also read: Chinese-owned MG Motor India to sell majority stake; invest Rs 5,000 crore by 2028