The Board of Directors of Tata Motors Ltdhas approveda Composite Scheme of Arrangement involving thedemerger of its CV business undertaking and the merger of Tata Motors Passenger Vehicles (TMPV) with the existing listed company thereby resulting in two separate listed companies for the CV and PV businesses. Share entitlement ratiowill be 1:1,e.,theshareholders of Tata Motors Ltd will have an identical shareholding in both the listed entities. The schemewill further empower the respective businesses to pursue their differentiated strategies with greater agilityand will enhance value for the shareholders. The above transactionis subject to the necessary shareholders, creditors and regulatory approvals.
Mumbai, August 1, 2024: In furtherance to the announcement made on March 4, 2024, the Board of Directors of Tata Motors Limited (TML), today, has approved aComposite Scheme of Arrangementamongst 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 (“Scheme”).
As a part of the Scheme, TML will demerge its Commercial Vehicle undertaking involving theCommercial Vehicle business (all the assets, liabilities and employees relating to the Commercial vehicle business) and allits related investments into TMLCV.Further, pursuant to the Scheme, the existing Passenger Vehicle business in TMPV, will be merged intoTML, the existing listed entity.Uponthe Scheme becoming effective, both TMLCVand TML will be renamed, resulting in two separate listed entities: 1) The Commercial Vehicle business and its related investments, under the name TML, and 2) The Passenger Vehicle business, the Electric Vehicle (TPEM) business, JLR and their related investments, under the name TMPV.
Pursuant to the Scheme, shareholders of TML will receive ONE share of TMLCV of facevalue Rs 2/- fully paid up for every ONE fully paid-up share of Rs 2/- held in TMLof 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 approvalswhich can take around 12-15 months to complete.
PwC Business Consulting Services LLPhas 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 advisorsto the transaction. Deloitte Touche Tohmatsu India LLP are the tax advisors for the transaction.
