Sundaram Clayton gets nod for group segregation plan

Sundaram Clayton Ltd (SCL), part of TVS group, today said that draft composite scheme of arrangement and amalgamation among SCL, Sundaram Investment Ltd (SIL), TVS Investments Ltd (TVSI) and Anusha Investments Ltd (AIL) was approved.

The company was planning to segregate its non-auto business into a separate company and de-merge it into a subsidiary company. The new company would also be listed, according to a company senior official.

The said scheme was approved by the committee of directors at its meeting held on November 14, and it was subject to approval of stock exchanges, shareholders of the company at the court-convened separate meetings and Madras High Court, according to an SCL announcement on Bombay Stock Exchange on Monday.

 

According to the proposed scheme, demerger of non-automotive related business will be in favour of SIL, comprising all assets, liabilities, duties, rights and obligations relatable to the demerged undertaking to SIL, while retaining automotive-related business with SCL.

The amalgamation of TVSI with SIL, and AIL with SCL, listing of new shares of SCL and the shares of SIL were subject to statutory compliances, the company said.

SCL’s board of directors on August 13 this year had approved proposals which include acquisition by the company of the entire paid-up capital of Rs 5 lakh of Sundaram Investment Ltd (SIL), de-merger of non-automotive-related business into SIL, and merger of TVS Investments Ltd, its wholly-owned subsidiary, with SIL.

Earlier, SCL’s executive director H Lakshmanan said that SCL, in addition to having a die casting unit, also had investments in companies like TVS Motor and other non-auto companies like TVS Electronics and TVS Capital Funds.

“We have got about 18 investment companies. What we are planning to do is, segregate the non-auto into separate company and demerge it in a subsidiary company and list it. In simple terms two companies one will focus on auto business and other one to focus on non-auto,” he said.

Gopal Srinivasan who is the joint managing director of Sundaram-Clayton Ltd will head the new company.

SCL, part of the $4 billion TVS group, is one of the leading auto components manufacturing and distribution groups and also a leading supplier of aluminum die castings to automotive and non-automotive sector.