Mahindra Cancels Share Purchase Pact Worth Rs 105 Cr with CLP India

Mahindra & Mahindra has terminated a share purchase agreement with CLP India to sell the entire stake held by Mahindra Renewables in Neo Solren.

Mahindra & Mahindra (M&M) has announced that it has terminated a share purchase agreement with CLP India to sell the entire stake held by its step down arm Mahindra Renewables in Neo Solren (NSPL) for Rs 104.67 crore.

In February this year, M&M had announced that its wholly-owned arm Mahindra Renewables would sell its entire stake in three subsidiaries to CLP India, a part of Hong Kong-based CLP Group, for nearly Rs 340 crore.

“Given that the closing has not occurred within the agreed timeframes, the share purchase agreement which was entered into for the sale of 93,15,000 equity shares of Rs 10 each of NSPL held by MRPL to CLP India stands terminated on 10th September 2020,” M&M stated in a regulatory filing.

Mahindra Renewables Pvt Ltd (MRPL) had agreed to sell its entire stake aggregating 100 percent of the paid-up equity share capital in Cleansolar Renewable Energy (CREPL), Divine Solren (DSPL) and Neo Solren Pvt Ltd (NSPL), wholly-owned subsidiaries of MRPL, to CLP India (CLP). As per the agreement CLP was to buy 93,15,000 equity shares of Rs 10 each of NSPL at a price of Rs 112.37 per share aggregating to Rs 104.67 crore.

The closure of the transaction, originally expected to be completed by May 31, 2020, was extended till September in view of difficulties due to the coronavirus pandemic.

The regulatory filing issued by M&M, however, does not mention anything about the other two transactions. And there is no clarifications from the firm if they will go ahead as planned or meet a similar outcome.

Recently, the firms other vertical – Mahindra Electric – criticised the Ministry of Road Transport and Highways’s (MoRTH) move to allow sale and registration of electric vehicles (EVs) without pre-fitted batteries, saying no country in the world allows such a system and the step has not been thought through.

The government on August 12, 2020, had allowed the sale and registration of electric vehicles without factory-fitted batteries, which account for about 30-40 percent of the total cost of EVs, and also stated that the batteries can be provided separately by vendors and OEMs.

To which Mahindra Electric MD and CEO Mahesh Babu responded that “No country in the world allows registration of EV’s without battery. We will explain to the government that this notification has created confusion,” Further adding that up to the sale of the vehicle, the OEM (original equipment manufacturer) is responsible for the safety of the vehicle. For a vehicle that is tested, manufactured, and sold as an integrated unit, the OEM is responsible for the warranty.