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Tata Motors transfers defence business to TASL

11/05/2018 | Author: Autoguide | 0 Comments Back To Home   < Previous News   |   Next news >

Mr. Guenter Butschek, MD of Tata Motors

The Board of Tata Motors Ltd (TML) announced the sale of its defence business to group entity Tata Advanced Systems Limited (TASL) recently. This will not include the pure civilian vehicles which will continue to be with TML. 
 
TML will receive an upfront consideration of Rs 100 crore, adjusted for capex incurred and changes in working capital in the intervening period until closure date. The company will also sell its shareholding in its wholly owned subsidiary, TAL Manufacturing Solutions Ltd (TAL) to TASL at an enterprise value of Rs 625 crores. As a condition precedent, Tata Motors will acquire the non-aerospace business from TAL at a value of Rs 10 lakh. 
 
This is in line with Tata Motors’ plan to drive Turnaround 2.0, take necessary steps to further its defence business by leveraging the scale and strengths of the unified aerospace and defence entity at the Group level, while monetising its non-core assets to reduce net-debt.
 
Commenting on the two strategic deals, Mr Guenter Butschek, CEO & MD, Tata Motors, said, “We will continue providing civilian logistics vehicles to the Defence customers. On our transition to a full range combat vehicle player, we realised that our current portfolio is small and we need scale to unlock its true potential. We believe Tata Advanced Systems will be better equipped to execute larger and more complex projects and be more globally competitive as part of the larger Tata Group. Therefore we have decided that it is in our best interests to sell this part of the business to TASL and participate in the future growth of this business through a revenue share agreement.”
 
“Also, TAL Aerospace Solutions is a non-core business to Tata Motors. We have been working on charting our next phase of growth and would like to use the opportunity of consolidation at Group level to monetise our investment in this area,” Mr Butschek added. 
 

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