TaMo to create two listed entities via demerger
NEW DELHI: Tata Motors on Monday announced the demerger of its commercial and passenger vehicle segments into two separate listed entities to better capitalise on growth opportunities.
The commercial vehicles business and its related investments would be housed in one entity while the passenger vehicle business, including electric vehicles, Jaguar Land Rover (JLR) and its related investments, would be part of the second entity, the auto major said in a regulatory filing.
Tata Motors Chairman N Chandrasekaran said that Tata Motors has scripted a strong turnaround in the last few years.
“The three automotive business units are now operating independently and delivering consistent performance. This demerger will help them better capitalise on the opportunities provided by the market by enhancing their focus and agility,” he added.
The demerger would lead to a superior experience for customers, better growth prospects for employees and enhanced value for shareholders, Chandrasekaran stated.
As per the proposal approved by the company board in a meeting on Monday, the demerger will be implemented through an NCLT scheme of arrangement and all shareholders of Tata Motors shall continue to have identical shareholding in both the listed entities.
Chandrasekaran said the scheme of arrangement for the demerger shall be placed before the company board for approval in the coming months and will be subject to all necessary shareholder, creditor and regulatory approvals which could take a further 12-15 months to complete. “The demerger will have no adverse impact on employees, customers, and our business partners,” he stated. The auto major stated that the demerger is a logical progression of the subsidiarisation of PV and EV businesses done earlier in 2022.
The three automotive business units are now operating independently and delivering consistent performance. This demerger will help them better capitalise on the opportunities provided by the market by enhancing their focus and agility
— N Chandrasekaran, chairman, Tata Motors