MUMBAI: Homegrown vehicle manufacturer Tata Motors Ltd (TML) on Friday said its board has approved setting up of a new subsidiary for its passenger vehicle (PV) business.
The company will merge the electric vehicle (EV) vertical with its PV business under the new subsidiary by transferring assets, IPs and employees directly related to the PV business to make it a fully functional standalone entity through slump sale, it said in a regulatory filing.
The company, however, clarified that certain shared services and central functions will be retained at TML to deliver cost-based synergies to the group.
“The proposed transfer shall be implemented through a scheme of arrangement, which will be tabled for approval to the TML Board over the next few weeks. Implementation of the scheme will be subject to regulatory and statutory approvals as applicable, including approval of shareholders and creditors. We expect the transfer process to be completed in the next one year," Tata Motors said in a statement.
The company also announced that Shailesh Chandra, president of electric vehicles (EV) and corporate strategy, will be appointed as the president for the PV business, which will also overlook EVs, effective 1 April.
Chandra will take over the responsibility from the Mayank Pareek, president PV business, who, TML said, will retire from the company by end of February 2021.
“Shailesh and Mayank will work on transition over the next few weeks post which Mayank will be retiring from TML by end of February 2021," the company said.