The Board of Directors of Tata Motors Limited (TML) has approved a Composite Scheme of Arrangement involving TML, TML Commercial Vehicles Limited (TMLCV), Tata Motors Passenger Vehicles Limited (TMPV), and their respective shareholders. This decision follows the announcement made on March 4, 2024, a communication from Tata Motors said.
As part of the restructuring, TML will demerge its Commercial Vehicle undertaking, including all related assets, liabilities, and employees, into TMLCV. Concurrently, the existing Passenger Vehicle business in TMPV will be merged into TML, the existing listed entity. Upon the Scheme's effectiveness, the newly structured entities will be renamed, resulting in two separate listed entities: the Commercial Vehicle business, along with its related investments, will operate under the name TML, while the Passenger Vehicle business, Electric Vehicle (TPEM) business, JLR, and their related investments will continue under the name TMPV.
Under the terms of the Scheme, shareholders of TML will receive one share of TMLCV of face value Rs 2/- fully paid up for every one fully paid-up share of Rs 2/- held in TML, maintaining an equivalent class ('Entitlement Ratio'), the communicated noted.
This strategic restructuring aims to allow the respective business groups to pursue differentiated strategies with greater agility, reinforce accountability, and ultimately enhance shareholder value. The Scheme is designed to have no adverse impact on employees, customers, creditors, and other business partners.
The completion of the Scheme is contingent upon obtaining all necessary approvals from shareholders, creditors, and regulatory authorities, a process expected to take approximately 12-15 months.
The share entitlement report for the transaction has been provided by PwC Business Consulting Services LLP, with SBI Capital Markets serving as the fairness opinion provider for the share entitlement ratio. Legal advisory services are being provided by AZB & Partners, and Deloitte Touche Tohmatsu India LLP is acting as the tax advisor for the transaction.
Also Read:
Tata Motors Introduces 'Vidyadhan' & 'Utkarsha' To Aid Technicians' Children's Education