British International Investment (BII) will invest Rs 1,925 crore ($250 million) in a new four-wheeler passenger electric vehicle company to be set up by Mahindra & Mahindra, the Indian auto major informed the exchanges on February 21. BII is the UK government’s development financial institution.
The investment is valued at Rs 70,070 crore ($9.1 billion) and will be completed in two tranches in cash. The first tranche will be of up to Rs 1,200 crore and the second will be for Rs 725 crore, subject to achievement of certain milestones agreed upon between the companies, the release added.
Notably, M&M will also be investing the same amount into the newly hived off subsidiary, it said. The first tranche is expected to be closed by June 30, 2023 and the second by FY24 subject to milestones.
The partnership will “accelerate growth of the four-wheel passenger EV business and get growth capital to fund the business” and “significantly leverage manufacturing capabilities and product development of M&M and ecosystem of suppliers, dealers and financiers,” it said.
Funds infused by the BII and M&M will be used to “create and market a world-class Electric SUV portfolio with advanced technologies”, it added.
BII’s investment would give it a 2.75-4.76 percent shareholding in the new EV Company on a fully diluted basis, and nominal shareholding of 100 Equity Shares. M&M will hold the arm 100 percent equity share capital of the company.
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