The new Board with twelve additional directors is as under: This marks the successful completion of the demerger process, which was initiated by the Company with the Board approval on May 17, Naresh Chandra and — Shri. Bajaj Auto Ltd BAL at its Board meeting held on May 17, decided to demerge its undertakings into three separate entities as under: The demerger will ultimately create three separate entities auto, wind power and financial services and primary investment company. Never miss a great news story! Bajaj Auto demerger approved Highlights of the Scheme of Demerger as well as certain changes made in the composition of the Board of the directors of the three Companies are given in the following paragraphs I Highlights of the Scheme of De-merger Bajaj Auto Ltd BAL formed two wholly owned subsidiaries, viz. Rahul Bajaj demerher the Non-Executive Chairman. In addition, a total of Rs crore in cash and cash equivalents would demergef transferred to BFL.
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To be renamed as Bajaj Auto Ltd. Post-demerger shareholding: Why has the company done this? For the Bajaj Auto Ltd. This total stake has been acquired at an extremely nominal cost. This company will be the group holding and Investment Company. In essence, the promoter group would get controlling interest in all three-group companies at a much lower cost than it would otherwise have to incur.
For non-promoter shareholders of Bajaj Auto Ltd. Since this dilution has taken place at par, the company will not benefit significantly from the funds so raised. How does the management justify the demerger scheme? Separation of businesses would enable focus on core businesses and strengthen competencies. Separation of businesses would clearly establish management focus on respective businesses.
The two new companies will be able to tap at arms length basis into the cash pool of the investment company to support new business initiatives. It will enable investors to hold separate focused stocks. It will enable transparent benchmarking with peers. Special issues: The insurance business: The issues relating to the insurance business are not directly related to the demerger.
This can be done at a price of Rs. We do not clearly understand the implication of this additional interest rate, as details are not clear. To conclude The basic purpose of the demerger-to separate unrelated businesses, so that there can be better focus on each business, is justified.
Promoters have increased their stake and acquired controlling interest in the two new companies without having to make an open offer or pay controlling premium. It may be worthwhile for non-promoters investors to contest the scheme on the ground that the same is not in public interest. We would love to answer.
Bajaj Auto unveils demerger plan
Announcing the plans, Bajaj Auto Chairman Rahul Bajaj said the move to demerge the company was to unlock shareholder value and not to divide the group between his two sons — Rajiv and Sanjiv. The demerger would be completed this year. Rebuffing suggestions that the move was to spilt the group, he said: "I will be the chairman of all the three companies. It is not a split of Bajaj Auto. The transaction will enable the new companies to tap into the cash pool of BHIL to support future growth, while enabling BHIL to participate in the growth of the auto business and the financial services business. Ruling out any change in management structure of the group, Rahul Bajaj said: "There is generally no change in the management structure.
Bajaj Auto Board approves demerger scheme