Shareholders of farm machinery and construction equipment major Escorts Ltd have approved the preferential allotment of nearly 94 lakh shares to Japan's Kubota Corporation, which is seeking a majority control of the Indian partner and become a joint promoter, as per a BSE filing on Monday.
The shareholders have also approved the change of the name of the company to Escorts Kubota Ltd or such other name containing the trade names Escorts and Kubota approved by authorities, the filing by Escorts said. Besides, the members have given their nod to increase the number of maximum directors which may be appointed on the board to 18, it added.
The development follows last month's deal under which Kubota will acquire an additional 5.9 percent stake in Escorts for Rs 1,872.74 crore, paving the way for the Japanese partner to become a majority stakeholder of up to 54-55 percent for which it could invest nearly Rs 10,000 crore, including an open offer to public shareholders for an additional 26 percent stake.
The special resolution to issue 93,63,726 equity shares of the company on a preferential allotment basis to Kubota and issuance of offer letter was approved by shareholders with 99.99 percent votes in favour, Escorts said.
Special resolutions to approve the change in the name of the company and alteration to the articles of association were approved with 99.99 percent and 98.75 percent votes in favour, respectively, it added.
The company further said its special resolution to increase the limit of number of directors to 18 also received nod of the shareholders with 99.47 percent votes in favour.
Escorts currently has 12 directors on its board. An ordinary resolution to approve related party transactions with Kubota was also passed with 99.99 percent votes for it, Escorts added.
Proxy advisory firm Stakeholders Empowerment Services had advised shareholders of the company to vote against the preferential allotment to Kubota, changing the name of the company and alteration of articles of association and the increase in the number of board members saying the Japanese firm was not paying any premium for the shares of Escorts.
(Edited by : Jomy Jos Pullokaran)