As per the scheme, the existing Passenger Vehicle business in TMPV, will be merged into TML, the existing listed entity, the company said in a regulatory filing. File

The Board of Directors of Tata Motors Ltd. (TML) on August 1 approved a Composite Scheme of Arrangement amongst TML, TML Commercial Vehicles Limited (TMLCV), Tata Motors Passenger Vehicles Limited (TMPV) and their respective shareholders for separation of the Commercial Vehicles and Passenger Vehicles businesses of the company into two entities.

As a part of the scheme, TML will demerge its Commercial Vehicle undertaking involving the Commercial Vehicle business (all the assets, liabilities and employees relating to the Commercial vehicle business) and all its related investments into TMLCV.

As per the scheme, the existing Passenger Vehicle business in TMPV, will be merged into TML, the existing listed entity, the company said in a regulatory filing.

After the scheme becomes effective, both TMLCV and TML will be renamed, resulting in two separate listed entities. These include the Commercial Vehicle business and its related investments, under the name TML, and The Passenger Vehicle business, the Electric Vehicle (TPEM) business, JLR and their related investments, under the name TMPV.

According to the scheme, shareholders of TML will receive 01 share of TMLCV of face value ₹2 fully paid up for every 01 fully paid-up share of ₹2 held in TML of the same class.

“These actions would further empower the respective business groups to pursue their differentiated strategies with greater agility while reinforcing accountability and will enhance shareholder value. The scheme will not have any adverse impact on employees, customers, creditors and other business partners,” Tata Motors said in a statement.

The scheme is subject to all the necessary shareholder, creditor and regulatory approvals which can take around 12-15 months to complete, the company said.