Tata Motors To Sell Its Defense And Aerospace Portfolio To Tata Advanced Systems
Tata Motors Limited (TML), a leading global automotive company providing smart mobility solutions across commercial and passenger vehicles, announced that its Board has approved, subject to the requisite regulatory and other approvals, the following:
1. The sale of its defence business to Group entity Tata Advanced Systems Limited (TASL). This will not include the pure civilian vehicles which will continue to be with TML. TML will receive an upfront consideration of Rs 100 Cr, adjusted for capex incurred and changes in working capital in the intervening period until closure date, and a deferred consideration of 3% of the revenue generated from identified Specialized Defence Projects for up to 15 years from FY20 subject to a maximum of Rs 1750 Crs.
2. The sale of 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 no -aerospace business from TAL at a value of Rs.1 0 lakhs.
This is in line with Tata Motor's 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 evel, while monetizing its non-core assets to reduce net-debt.