Kubota Corporation (Headquarters: Naniwa-ku, Osaka, Japan; President and Representative Director: Yuichi Kitao; hereinafter, \u201cKubota\u201d) announced today that it will invest in an Indian leading tractor manufacturer, Escorts Limited (Headquarters: India, Chairman and Managing Director: Nikhil Nanda; hereinafter, \u201cEL\u201d).<\/p>\n
Through this investment, Kubota intends to increase its presence in India – the world\u2019s largest tractor market – as well as its commitment to the competitive tractor market, which has massive growth potential, thus further expanding its business.
\nhttps:\/\/www.kubota.com\/news\/2020\/img\/20200320.jpg
\nTractor produced by EL started distributing through Kubota’s sales network in worldwide.
\n\u00b7
\n\u00b7 Background and aims
\n\u00b7
\n\u00b7 The tractor market in India is one of the world\u2019s largest in terms of unit sales and expects to expand further. In 2008, Kubota established Kubota Agricultural Machinery India Pvt. Ltd. (hereinafter, \u201cKAI\u201d) as a foothold in the Indian market.
\n\u00b7 At present, local manufacturers are playing key roles there, and they are all enhancing partnerships with foreign-affiliated manufacturers. In February 2019, Kubota established a joint-venture tractor manufacturing company with EL and mass production is due to start this July.
\n\u00b7 Through this capital tie, the two companies intend to deepen their cooperative relationship further and, by leveraging each other\u2019s strengths, create synergy across a broad range of their business, including development, production, sales, distribution, and parts procurement, in a bid to extend their reach in the Indian market.
\n\u00b7 Meanwhile, the competitive tractors which currently form the core of the Indian tractor market, are gaining popularity in other markets around the world. Kubota hopes to expand its global reach in those model market by tapping into EL\u2019s parts procurement networks and capability to reduce cost.
\nInvestment scheme
\n\u00b7 EL will issue new equity shares to Kubota on a preferential allotment basis (subject to shareholders\u2019 and necessary regulatory approvals) pursuant to which Kubota will hold 9.1% of EL\u2019s paid up share capital.
\n\u00b7 The total amount of investment will be approximately 16 billion yen.
\n\u00b7 Subsequent to the preferential allotment to Kubota, EL will undertake a reduction of its share capital from the shares held by the Escorts Benefit and Welfare Trust (subject to receipt of necessary approvals) of such number of equity shares as are being issued to Kubota under the preferential allotment. Post the capital reduction, Kubota\u2019s stake in EL will increase to 10%.
\nKubota<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"