Tata Motors' passenger vehicles business hive-off comes into effect from today
PremiumTata Motors says the move will help in providing a differentiated focus for the PV and commercial vehicle businesses separately.
The hiving off and transfer of Tata Motors' entire passenger vehicle undertaking to Tata Motors Passenger Vehicles Ltd have come into effect from Saturday, the homegrown auto major said on Saturday.
Tata Motors Ltd today said the hiving off and transfer of its entire PV (passenger vehicle) undertaking to Tata Motors Passenger Vehicle Ltd has come into effect from today i.e. Jan 1.
In a statement to the stock exchanges, Tata Motors said Tata Motors has settled the purchase consideration of ₹9,417 crore payable for the purchase of Passenger Vehicle Undertaking under the scheme by allotment of 941,70,00,000 equity shares of ₹10 each in Tata Motors Passenger Vehicles Ltd.
The scheme is effective from today, January 1, 2022. "Therefore, the entire Passenger Vehicle Undertaking of the company stands transferred under the scheme to Tata Motors Passenger Vehicles Limited with effect from January 1, 2022," the company said.
As an integral part of the scheme, a portion of the securities premium account has been written down by adjusting against the accumulated losses of the company to the extent of ₹11,173.59 crore as on January 1, 2022. "Further, pursuant to the effectiveness of the scheme, the Tata Motors Limited Employees Stock Option Scheme 2018 hereby stands amended," the company added.
In August last year, Tata Motors had received approval from the National Company Law Tribunal (NCLT), Mumbai, to hive off its PV business into a separate entity. "This is in furtherance of our letter dated August 27, 2021, informing about the approval and sanction of the Scheme by the Honb’le National Company Law Tribunal, Mumbai Bench vide order dated August 24, 2021," Tata Motors said.
In October last year, Tata Motors said it would raise USD 1 billion ( ₹7,500 crore) in its passenger electric vehicle business from TPG Rise Climate at a valuation of up to USD 9.1 billion. Under the agreement, TPG Rise Climate along with its co-investor ADQ, will invest in a subsidiary of Tata Motors that will be newly incorporated.
Tata Motors had maintained that as part of an overall business reorganisation plan and in order to provide for the optimum running, growth and development of the PV undertaking and its interests, it was necessary to realign the PV business.
This will help in providing a differentiated focus for the PV and commercial vehicle businesses separately.
With PTI inputs
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