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RITES Announces Voluntary Closure of MMG- Metro Management Group Limited
Team Finance Saathi
27/Dec/2024
What's covered under the Article:
- RITES Limited announces the closure of MMG- Metro Management Group Limited formed for Tel Aviv Metro tender.
- JV with DMRC and Poran Shrem dissolved due to ineligibility in the bid evaluation process.
- RITES made a provision for diminution against its $73,113.99 investment in the entity.
RITES Limited, a major player in the infrastructure sector, has officially announced the voluntary dissolution of its joint venture entity, MMG Metro Management Group Limited (MMG), which was formed for the sole purpose of participating in a bid to manage the Tel Aviv Metropolitan Metro Lines in Israel. The joint venture, formed between RITES, DMRC, and Israeli firm Poran Shrem Engineering and Appraisal Limited, was unable to meet the required eligibility criteria during the bid evaluation process, leading to the decision to dissolve the company.
Key Details of the Dissolution:
- MMG Metro Management Group Limited was incorporated on February 7, 2023, with the objective of managing the Tel Aviv Metro Network. The company was a joint venture between RITES (24.5% shareholding), DMRC (24.5%), and Poran Shrem (51%).
- However, during the tendering process, the consortium could not fulfill the necessary criteria for eligibility, and as a result, MMG will be wound up.
- RITES' financial investment in MMG stands at USD 73,113.99 (approx. INR 59.65 Lakhs), and the company has made provisions for diminution against the amount invested in this joint venture.
Background and Impact:
This dissolution marks the end of MMG’s operational plans, which were based on the assumption of being awarded the contract by the NTA- Metropolitan Mass Transit System Ltd (the governing body of the Tel Aviv Metro). However, with the failed bid and the absence of further need for the joint venture, RITES has moved ahead with winding up the company.
For RITES Limited, this development does not change its core operations, but it does highlight the dynamic nature of the international ventures it engages in. The voluntary liquidation process ensures that the company adheres to both SEBI regulations and corporate governance standards.
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