Mahindra and Mahindra delays investment in EV arm asset, transfer by June 2026
- ByStartupStory | February 22, 2023
Mahindra and Mahindra announced that it has entered into an asset transfer agreement with its wholly owned subsidiary EV subsidiary for transfer of certain identified assets (capital work in progress) pertaining to the four-wheeler passenger electric vehicles.
The wholly-owned subsidiary is Mahindra Electric Automobile Ltd. (MEAL) , was incorporated in October 2022.
The remaining assets will be transferred to the subsidiary by June 2026.
The total investment of the company in the said assets, classified as “capital work in progress” for financial year 2022 is approximately ₹230 crore, which is 0.6 percent of the company’s net worth.
“The total Investment of the Company in the said assets classified as capital work in progress as per the audited Financial Statements for the year ended 31st March, 2022 is approximately Rs. 230 crores, which constitutes 0.6% of the total net worth of the Company as of 31st March, 2022,” said Mahindra and Mahindra in its filing.
Mahindra and Mahindra had announced in July last year that the company intends to hive off assets related to the four-wheel passenger EVs business of the company to a new unit, which will be incorporated as a wholly-owned subsidiary, called MEAL.
The company had signed a share purchase agreement with British International Investment Plc for investments of ₹1,925 crore in MEAL.
Mahindra and Mahindra and British International Investment (BII) are to invest ₹1,925 crore each in Mahindra Electric Automobile Ltd. (MEAL).
The investments were supposed to be made in two tranches and according to it the first tranche of ₹1,200 crore was to be invested by June 2023. It has now been extended to March 31, 2024.
The second tranche of ₹725 crore, will now be completed by July 1, 2024, subject to the milestones achieved.
The company had earlier said that the second tranche would be completed in the financial year 2024 without specifying the date.
“The investment of upto Rs.1,925 crores in EVCo by the Company and BII each would take place in two or more tranches i.e. investment of upto Rs. 1,200 crores will happen on fulfilment of conditions precedent and is expected to be completed not later than 31st March, 2024 and the balance investment of upto Rs. 725 crores would be based on the milestones being achieved by 1st July, 2024,” the filing added.
The company’s scrip was trading 0.44 percent down at ₹1,345.85 on BSE.
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