Hive-Off Price Of Telco Arms Fixed At Rs 383 Cr
Tata Engineering and Locomotive Co Ltd (Telco) has fixed the transfer price for hiving off its three sub-assemblies at Rs 383 crore.
The sub-assemblies have been hived off with effect from April 1 as part of the company's efforts to focus on automobile manufacturing.
Telco, which has made independent valuation of the divisions which company officials declined to disclose, is expected to book substantial profits from the spin-off exercise during the current financial year.
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The company is looking at forging joint ventures for each of the three companies where it will also divest large equity stakes in favour of the partners.
Consequently, the company's workforce has been cut by 4,000 to 30,000 employees. The move will also reduce the company's wage bill.
The three sub-assemblies which have been spun off include the machine tools and growth divisions at Jamshedpur and Pune (as two separate companies), and the heavy transmission axles and wheels division, also located in Jamshedpur.
The company had earlier targeted March 31 within which to identify partners for the three companies. However, following poor response in terms of price, the process has been delayed and is expected to be finalised by the end of the year.
Analysts have put the value of the three divisions in excess of Rs 1,000 crore, but company officials declined to reveal the details of the valuation it has done.
Analysts estimate revenue earnings from the divisions at close to Rs 1,000 crore out of the company's total earnings of Rs 6,500 crore.
Over the last few months, names of several component majors have cropped up as possible partners of Telco in the joint ventures. They include Eaton Corporation of the US and Meritor, a part of the Rockwell group.
During the last fiscal, Telco had also hived off its construction equipment division, Telcon, where it identified Japanese major Hitachi as the equity partner. The Tata firm had divested 20 per cent stake in Telcon in favour of Hitachi for a total consideration of Rs 95 crore.