Tata Motors Demerges Into Two Separate Entities

[350Z]

The Board of Directors of Tata Motors Limited has approved the proposal of demerger into two separate listed companies: The Commercial Vehicles Business and The Passenger Vehicles Business (including PV, EV, JLR).

• The demerger will be implemented through an NCLT scheme of arrangement and all shareholders of TML shall continue to have the identical shareholding in both the listed entities.
• Since 2021, the Commercial Vehicles, Passenger Vehicles (PV+EV), and Jaguar Land Rover (JLR) businesses of Tata Motors have been operating independently under their respective CEOs.
• 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 to pursue their respective strategies.
• There are considerable synergies to be harnessed across PV, EV and JLR particularly in the areas of EVs, autonomous vehicles, and vehicle software which the demerger will help secure.
• The NCLT scheme of arrangement will be placed before the Board of Directors for approval in the coming months and will be subject to all necessary shareholder, creditor and regulatory approvals.
• The aforementioned procedure could take a further 12-15 months to complete. The demerger will have no adverse impact on Tata Motors employees, customers and business partners.

Drive Safe,
350Z

 

[350Z]

The Board of Directors of Tata Motors Limited (TML) has approved a Composite Scheme of Arrangement amongst TML, TML Commercial Vehicles Limited (TMLCV), Tata Motors Passenger Vehicles Limited (TMPV) and their respective shareholders under Sections 230-232 and other applicable provisions of the Companies Act, 2013.

• TML will demerge its Commercial Vehicle undertaking involving the Commercial Vehicle business and all its related investments into TMLCV.
• Further, pursuant to the Scheme, the existing Passenger Vehicle business in TMPV, will be merged into TML, the existing listed entity. Upon the Scheme becoming effective, both TMLCV and TML will be renamed.
• Two separate listed entities will be: 1. The Commercial Vehicle business and its related investments (TML) and 2. The Passenger Vehicle business, Electric Vehicle business, JLR and related investments (TMPV).
• Pursuant to the Scheme, shareholders of TML will receive ONE share of TMLCV of face value ₹2/- fully paid up for every ONE fully paid-up share of ₹2/- held in TML of the same class (“Entitlement Ratio”).

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350Z

 

[350Z]

Tata Motors has issued a clarification on inaccurate reports published about the demerger. In this context, Tata Motors clarifies that:​

The published news titled “Holdco to House Tata Motors’ demerged CV, PV Businesses” is factually incorrect.

It is observed that sections of the media have reported on the above without any basis. The said demerger is being done through a composite scheme of arrangements to be approved by NCLT, the process for which is already underway. Appropriate notifications have been duly filed with the stock exchanges and are in public domain. It is to be noted, that there is no reference to any holding company in the scheme or the notifications filed.

1 Aug 2024 - https://nsearchives.nseindia.com/corporate/TATAMOTORS_01082024164324_NSEBSE.pdf.
4 Mar 2024 - https://nsearchives.nseindia.com/corporate/TATAMOTORS_04032024162040_NSEBSELETTER.pdf

Drive Safe,
350Z