Tata Motors Announced the Sale of Its Aerospace and Defence Divisions
May 21, 2018
Tata Motors Limited is one of the leading automobile manufacturers and they specialize in buses, trucks, cars, utility and defence vehicles. They are the largest automobile industry in India and Tata motors have its operating wings in South Korea, Thailand, Indonesia, South Africa and the UK. They function through a strong network of 76 subsidiary and associate companies which includes Jaguar Land Rover in the UK and Tata Daewoo in South Korea. There are approximately nine million vehicles by the Tata Motors on Indian roads alone. Tata Motors aims at delivering updated technology that is sustainable and well suited while keeping pace with the innovative needs of the young generation.Recently, Tata Motors Ltd (TML) announced that its board has approved the sale of their defence business wing to Group entity Tata Advanced Systems Limited (TASL). TML will continue to endorse its civilian vehicles as before. An upfront consideration of rs.100 crs will be received by TML. Specialized defense projects have generated revenue of 3 % for almost 15 years to a maximum of re.1750 crs from FY20 and the capex incurred have been adjusted with the changes in working capital in this period until the closure date. It is estimated that at a value of approximately Rs. 625 crs the shareholding will be on sale in its wholly owned subsidiary. As a precedent condition, TAL will offer the non-aerospace business to Tata motors at rs.10 lakhs. Guenter Butschek who is the CEO & MD of Tata Motors said that Tata Motors has been a strategic and loyal partner to the Indian Ministry of Defense for several decades. They will continue providing civilian logistics vehicles to the Defence customers. On their transition to a full range combat vehicle player, they have realized that their current portfolio is small and they need a scale to unlock its true potential. As part of the larger Tata group, TASL is believed to execute complex projects for a competitive market in a global scale. As part of the future business policy and future growth it has been decided to sell a part of this business to Tata advanced system limited and to ea its credit through an agreement of sharing the revenue globally.Tata Motors has been associated with the country ’s security and defence forces, for more than five decades and has supplied over 1,50,000 vehicles to the Indian Military and Paramilitary forces till now. The company offers products and services that not only meet the needs of the domestic market but are also destined to meet most extreme and strict standards globally. Tata Motors vehicles and defence utility vehicles are exported to the SAARC, ASEAN and African regions. Tata Motors has a feature-oriented portfolio in multi-axle range like 12×12, 8×8 & 6×6 and the company has started to supply to leading Missile OEMs across the world. Vehicles for UN peacekeeping missions are also supplied by the Tata Motors. Tata Motors’ range of off-road vehicles is also being demanded by the agencies involved in AID & Development, across the world like GSA, KBR, Oxfam, RONCO, and RA Inteational & Riders.