The NCLT scheme of arrangement for the Tata Motors demerger shall be placed before the TML Board of Directors for approval in the coming months.
The Tata Motors demerger, which will be implemented through an NCLT scheme of arrangement, will help the company refine its focus on the passenger and electric vehicle segments
Tata Motors on Monday, March 4, said its board of directors has approved a proposal to split the company into two separate listed companies. The demerger, which will be implemented through an NCLT scheme of arrangement in the coming months, will help the company refine its focus on the passenger and electric vehicle segments.
The commercial vehicles business and its related investments will be spun in one entity and the passenger vehicles (PV) businesses, including electric vehicles, Jaguar Land Rover and related investments, in another entity, Tata Motors said in a statement.
All shareholders of Tata Motors Ltd (TML) shall continue to have the identical shareholding in both the listed entities, it added.
“The demerger is a logical progression of the subsidiarisation of PV and EV businesses done earlier in 2022 and shall further empower the respective businesses,” Tata Motors stated.
The NCLT scheme of arrangement for the demerger shall be placed before the TML Board of Directors 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, according to the statement.
Tata group Chairman N Chandrasekaran said, “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 that this will lead to a superior experience for our customers, better growth prospects for our employees and, enhanced value for our shareholders.
