Mumbai- Tata Motors Limited's Board of Directors has approved a Composite Scheme of Arrangement among TML, TML Commercial Vehicles Limited (TMLCV), Tata Motors Passenger Vehicles Limited (TMPV), and their respective shareholders. This approval is under Sections 230-232 and other applicable provisions of the Companies Act, 2013.
Under the Scheme, Tata Motors Limited (TML) will demerge its Commercial Vehicle business, including all assets, liabilities, and employees, into TML Commercial Vehicles Limited (TMLCV). Concurrently, the Passenger Vehicle business from Tata Motors Passenger Vehicles Limited (TMPV) will merge into TML. Once effective, TML will focus on the Commercial Vehicle sector and be renamed accordingly, while TMPV will be renamed to encompass Passenger Vehicles, Electric Vehicles, JLR, and related investments.
Pursuant to 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 of the same class (“Entitlement Ratio”).
These actions would further empower the respective business groups to pursue their differentiated strategies with greater agility while reinforcing accountability and will enhance shareholder value. The Scheme will not have any adverse impact on employees, customers, creditors and other business partners.
The Scheme is subject to all the necessary shareholder, creditor and regulatory approvals which can take around 12-15 months to complete.
PwC Business Consulting Services LLP has provided the share entitlement report for the transaction, with SBI Capital Markets acting as fairness opinion provider for share entitlement ratio for the demerger. AZB & Partners are the legal advisors to the transaction. Deloitte Touche Tohmatsu India LLP are the tax advisors for the transaction.
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