Tata Motors successfully hives off its passenger vehicles business
Tata Motors has successfully hived off and transferred its entire passenger vehicle undertaking to Tata Motors Passenger Vehicles Ltd. Th move will help the company in providing a differentiated focus for the PV and commercial vehicle businesses separately as well as realise their potential.
The company's board approved the settling of ₹9,417 crore payable for the purchase of its passenger vehicle undertaking under the scheme by allotment of 941.7 crore equity shares of ₹10 each in Tata Motors Passenger Vehicles Ltd to it.
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The scheme became effective from January 1, 2022, and the appointed date as per the scheme is the 'effective date', the company said in a regulatory filing. "Therefore, the entire passenger vehicle undertaking of the company stands transferred under the scheme to Tata Motors Passenger Vehicles Ltd with effect from January 1, 2022," it stated.
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 as a part of the scheme. The company's passenger vehicles business unit has been valued at ₹9,417 crore.
Tata Motors, in August last year, had received approval from the National Company Law Tribunal (NCLT) Mumbai bench to hive off its passenger vehicles business unit into a separate entity. Before that, in March 2021, the shareholders of the company had voted and approved the transfer of the passenger vehicles business unit to TML Business Analytics Services Ltd, presently known as Tata Motors Passenger Vehicles Ltd.
In 2020, the company had said that it would turn its domestic PV business unit into a separate entity, and seek a strategic partnership in order to help the unit secure its long-term viability. In October, the company also said that 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.
(with inputs from PTI)