Tata Motors said that its subsidiary Tata Passenger Electric Mobility (TPEML) and Ford India (FIPL)have signed a unit transfer agreement (UTA) for the acquisition of FIPL's manufacturing plant situated at Sanand, Gujarat.
The agreement includes land and buildings, a vehicle manufacturing plant along with machinery and equipment and transfer of all eligible employees of FIPL's vehicle manufacturing operations at Sanand, for a total consideration, exclusive of taxes, of Rs 725.7 crore.
FIPL will continue to operate its Powertrain Manufacturing Facility by leasing back the land and buildings of the Powertrain Manufacturing Plant from TPEML on mutually agreed terms. TPEML has agreed to offer employment to the eligible employees of FIPL's Powertrain Manufacturing Plant in the event of FIPL's cessation of such operations.
The closure of the transaction will be subject to the receipt of relevant approvals from the government authorities and fulfilment of customary condition precedents. The government of Gujarat, TPEML and FIPL have already executed a tripartite MoU on 30 May 2022 to support all relevant approvals for the above transaction.
"With our manufacturing capacity nearing saturation, this acquisition is timely and a win-win for all stakeholders. It will unlock a state-of-the-art manufacturing capacity of 300,000 units per annum which is scalable to 420,000 units per annum, the company said in a statement.
TPEML would make the necessary investments to reconfigure the plant to adapt to Tata Motors' existing and future vehicle platforms. The unit is adjacent to the existing manufacturing facility of Tata Motors Passenger Vehicles at Sanand, which should help in a smooth transition.
Shailesh Chandra, managing director, Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility, said, The agreement with FIPL signed today is beneficial to all stakeholders and reflects Tata Motors strong aspiration to further strengthen its market position in the Passenger Vehicles segment and to continue to build on its leadership position in the electric vehicle segment.
Tata Motors, part of the Tata group, is a global automobile manufacturer of cars, utility vehicles, pick-ups, trucks and buses.
The auto major reported a consolidated net loss of Rs 5,006.60 crore in Q1 FY23 as against a net loss of Rs 4,450.92 crore in Q1 FY22. Revenue from operations increased 8.3% YoY to Rs 71,935 crore during the quarter ended 30 June 2022.
The scrip rose 0.61% to currently trade at Rs 468.25 on the BSE.
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