Bajaj Auto Board approves company's split
Bajaj Auto's board approves a demerger splitting the group into three separate entities with the creation of two new companies.business Updated: May 17, 2007 19:55 IST
Auto giant Bajaj Auto's board on Thursday approved a demerger scheme, splitting the group into three separate entities with the creation of two new companies.
Under the proposed scheme, effective from March 31, Bajaj Auto Ltd's various businesses including auto manufacturing and other strategic businesses such as wind energy, insurance and financial services, would be demerged into two newly incorporated subsidiaries Bajaj Holdings and Investment Ltd (BHIL) and Bajaj Finserv Ltd (BFL).
The manufacturing business would vest in BHIL and other strategic businesses would vest in BFL, the company informed the Bombay Stock Exchange.
After the demerger, for each share of Bajaj Auto, the shareholders would continue to hold one share of the company with face value of Rs 10 and would also be allotted one BHIL share of Rs 10 face value and one BFL share of Rs 5 face value.
As part of the restructuring, BHIL would be renamed "Bajaj Auto Ltd" and the existing Bajaj Auto Ltd would be renamed as "Bajaj Holdings and Investment Ltd".
The scheme, approved by the board, is subject to approvals as may be required including that of the stock exchanges, Bombay High Court, and shareholders of the company.
Considering the growth opportunities in the auto, wind-energy, insurance and finance sectors, the board has considered it timely and appropriate to de-merge these activities into separate entities, each of which can focus on these core businesses and strengthen competencies, the company said.