Tata Motors on Thursday said it has completed the transfer of its defence business with effect from April 1 to Tata Advanced Systems Ltd (TASL) for an upfront consideration of Rs 227.7 crore.
The transfer has been completed through a slump sale as per Scheme of Arrangement approved by National Company Law Tribunal at Mumbai and Hyderabad, the auto major said in a regulatory filing.
Tata Motors has been in the defence sector for several decades, and currently has a wide portfolio of logistics, combat support and armoured vehicles for the defence, paramilitary and state police forces.
In recent years, the company has also focussed on developing armoured carriers and platforms such as wheeled amphibious armoured fighting vehicles, mine protected and light armoured multi-role vehicles.
Tata Motors has partnered the Indian defence establishment in various strategic programmess such as MRSAM, Aakash, Agni, BrahMos, etc.
The company also exports defence vehicles to SAARC, ASEAN, and African nations.
TASL, a wholly owned subsidiary of Tata Sons, is focused on providing integrated solutions for aerospace, defence and homeland security.
"The sale of defence business to TASL is in line with Tata Group's strategy of consolidating the defence businesses under a single entity to bring scale and synergy," the company noted.
Tata Motors on its part will continue to play a significant role in the value chain by supplying chassis and aggregates to TASL for developing specialised defence applications, while continuing to supply pure civilian PVs (Passenger Vehicles) and the CVs (Commercial Vehicles) to defence forces directly, it added.
TASL will invest in enhancing design and development capabilities for expanding the global footprint and providing specialist, high value-added, futuristic solutions to defence customers in and outside India, it said.
The consolidation will yield benefits in the form of operational and financial synergies helping deliver better value for both the entities, the filing said.
Over the next several months, Tata Motors and TASL will work closely to ensure smooth transition of the defence business, it added.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)