The Bajaj on ‘3’ wheels...
The Board of Bajaj Auto Ltd. (BAL) has nodded a demerger scheme, ripping apart the nations number two- two wheeler manufacturer into three separate units. Consequently this exercise will create two new companies from the existing resources. The newly carved businesses will essentially be fully
owned subsidiaries namely, Bajaj Holdings and Investment Ltd. (BHIL) and Bajaj Finserv Ltd. (BFL). Rahul Bajaj revealed that the manufacturing business would remain in BHIL while other strategic businesses would be included in BFL. It has been further stated that there would be no change in the management structure in spite of all these split ups. As a matter of decision Rahul Bajaj’s elder son, Rajiv will continue to be the MD and CEO while younger Sanjiv will remain as the ED (additionally handling financial and international operations and BFL). The senior Bajaj revealed that the two new entities will have some common composition and will be consisting of a four member board, with Rahul himself, Madhur, Sanjiv and Rajiv at the helm. Post demerger, BAL shareholders have also been comforted as they would continue to hold one share of the company with face value of Rs.10, and would also be allotted additional BHIL and BFL shares, valued at Rs.10 and Rs.5 respectively. Apart from these changes, there is one major diversification worth to be noted! BAL will now be consequently renamed as Bajaj Holdings Ltd., eventually leading to a whopping Rs15 billion cash transferred to Bajaj Holdings. The new mega entity is also expected to get Rs37 billion cash or cash equivalents as part of the demerger. For starters, holdings of group companies, worth Rs27 billion are also on the cards. The share capital has been estimated to be close to Rs1.5 billion.
owned subsidiaries namely, Bajaj Holdings and Investment Ltd. (BHIL) and Bajaj Finserv Ltd. (BFL). Rahul Bajaj revealed that the manufacturing business would remain in BHIL while other strategic businesses would be included in BFL. It has been further stated that there would be no change in the management structure in spite of all these split ups. As a matter of decision Rahul Bajaj’s elder son, Rajiv will continue to be the MD and CEO while younger Sanjiv will remain as the ED (additionally handling financial and international operations and BFL). The senior Bajaj revealed that the two new entities will have some common composition and will be consisting of a four member board, with Rahul himself, Madhur, Sanjiv and Rajiv at the helm. Post demerger, BAL shareholders have also been comforted as they would continue to hold one share of the company with face value of Rs.10, and would also be allotted additional BHIL and BFL shares, valued at Rs.10 and Rs.5 respectively. Apart from these changes, there is one major diversification worth to be noted! BAL will now be consequently renamed as Bajaj Holdings Ltd., eventually leading to a whopping Rs15 billion cash transferred to Bajaj Holdings. The new mega entity is also expected to get Rs37 billion cash or cash equivalents as part of the demerger. For starters, holdings of group companies, worth Rs27 billion are also on the cards. The share capital has been estimated to be close to Rs1.5 billion.For Complete IIPM Article, Click on IIPM Article
Source: IIPM Editorial, 2006
An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative
Source: IIPM Editorial, 2006
An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative
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