Tata Motors on Thursday issued a clarification on an ET report that said Tata Sons is understood to be creating a holding company for Tata Motors to house its passenger car and commercial vehicle businesses that are being demerged and registered as two separate entities.
The auto major said, the 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.”
The ET report, citing sources had said, Tata Group chairman N Chandrasekaran will be the chairman of this holding entity with other key executives on board. “PB Balaji, Tata Motors’ chief financial officer credited with the automobile business’ successful restructuring, may most likely get a leadership role in the passenger vehicle (PV) entity which has more ambitious plans with its electric vehicle business,” as per the report.
Tata Motors significantly turned around each of its businesses by crafting and diligently executing distinct strategies for each of its auto business verticals – Winning decisively in CV, winning sustainably in PV, winning proactively in EV and winning distinctively in JLR.
In addition, to enable execution of these well differentiated strategies and to further empower each business to pursue it purposefully with greater agility and accountability, the Board has proposed the demerger of the Company into two separate listed companies housing the Commercial Vehicles business and its related investments in one entity and the Passenger Vehicles businesses including PV, EV, JLR and its related investments in another entity, ET’s report said.
“This will also help secure the considerable synergies across PV, EV and JLR particularly in the areas of EVs, autonomous vehicles, and vehicle software. This will lead each Company to deliver a superior experience for customers, better growth prospects for employees and, enhanced value for shareholders.”
