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Old 15th May 2023, 00:59   #16
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Re: MG Motor India's 5-year plan: Dilute shareholding, set up 2nd assembly plant

From purely an “image” perspective, it would help the brand not to be known as a “Chinese” company/car in India, so give up majority share to a multiple of smaller stakes where their share is over 51%, but you are still the major among the minority.. for eg 40% Chinese and 3 20% shareholders as Indians. Hence a 60% Indian owned company, but majority shareholder is still Chinese.

Happened earlier in multiple industries, perception affects branding.

Last edited by benbsb29 : 15th May 2023 at 05:00. Reason: Edited post for formatting.
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Old 15th May 2023, 13:27   #17
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Re: MG Motor India's 5-year plan: Dilute shareholding, set up 2nd assembly plant

Would like to add my 2 cents here.

In India, in today's political climate, running a JV with or an Indian subsidiary of a Chinese company is extremely difficult.
Any share holding over 10% in total ownership is being looked down upon, there are innumerable hurdles in getting FDI to set up plants or expand and it is equally difficult to repatriate profits or in the form of loyalties back to China.
Facing this problem personally too.

IIRC MG is also struggling to get funds from their parent company SAIC in China for further expansion and the recent cases involving hawala disguised as royalties by some companies is not helping the situation.

Diluting their share makes sense, since the company will be Indian majority owned or working towards it.
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