New Delhi: Suzuki Motor Corporation of Japan and the government have reached an official level agreement on divestment of equity in the joint venture Maruti Udyog Ltd (MUL) by the Indian partner.

The broad agreement was reached on April 29 after three month-long negotiations between the Japanese team led by Suzuki official Nakanishi and the Indian side represented by Secretary (heavy industry) Ravindra Gupta and Secretary (disinvestment) Pradeep Baijal, sources said.

Government is expected to divest upto five per cent of stake by not participating in the proposed Rs 400 crore rights issue in lieu of renunciation and control premium, sources said, adding that the two sides have also agreed on pricing of MUL equity and premium for the rights issue.

Officials in the Heavy Industry Ministry and Disinvestment Ministry could not be contacted for their comments but sources said that the issue would now go before the Cabinet Committee on Disinvestment that is likely to meet during the first half of next month.

After completion of negotiations, the Suzuki team left for Japan, sources said, but did not give any indication on fixation of MUL share price and the premium that the government would get.

PTI