The Board of Directors of Tata Motors Finance (TMFL), a step down wholly owned subsidiary of Tata Motors and the Board of Directors of Tata Capital (TCL) have, at their respective Board Meetings held today, i.e., 04 June 2024, approved the Scheme of Arrangement amongst TMFL and TCL and their respective shareholders.
As consideration for the merger, TCL will issue its equity shares to the shareholders of TMFL resulting in TML effectively holding a 4.7% stake1 in the merged entity.
The transaction is also in-line with TML's stated objective of exiting non-core businesses and focus its capital spends on emerging technologies and products.
TCL has limited presence in CV/ PV financing. With this merger TCL will gain new customers in the fast-growing CV/PV financing segments, which it aims to serve with innovative products and digital offerings, whilst providing differentiated growth opportunities to employees.
The scheme of arrangement will be subject to approval of SEBI, RBI, NCLT amongst others and all shareholders and creditors of TCL and TMFL and will take ~9-12 months to complete.
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