TVS group all set for mega restructuring

The restructuring, which will involve nine listed companies, including TVS Motor, Sundaram Clayton, Sundram Fasteners, TVS Electronics and TVS Srichakra, among others, will give each family group co­mplete ownership of businesses they manage while scrapping the holding company.

After executing the memorandum of family arrangement (MFA) in Dece­mber, members of the $8.5-billion TVS group have decided to implement the family arrangement, inter alia, thro­ugh a composite scheme of amalgamation and arrangement to be filed with the National Company Law Tribunal (NCLT).

On December 10, 2020, an MFA was executed among various mem­bers of the TVS family who are shareholders of T V Sundram Iyengar & Sons (TVSS), Sundaram Industries (SIPL) and Southern Roadways (SRW).

The three firms are collectively refer­red to as the TVS holding companies.

According to sources in the group, pursuant to the MFA, senior members of the TVS family were nominated to deliberate on the implementation of the family arrangement.

On Wednesday, senior nominated members of the TVS family decided to implement the family arrangement.

Senior members have said that present shareholders of the TVS holding companies primarily consist third and fourth generation family members of original founder, TV Sundaram Iyengar.

The group currently has over 50 companies that have been traditionally managed by members of different branches of the TVS family.

With the passage of time, various members of the TVS family felt that the ownership of shares in various companies/ businesses should align and synchronise with the management of respective businesses.

The arrangement pursuant to the MFA is envisaged to bring about amity and maintain goodwill among members of the TVS family.

Family members said this will preserve memories of original foun­der, TV Sundaram Iyengar, and maintain overall peace and harmony within the TVS family.

The MFA has been executed among various mem­bers of the TVS family who are shareholders of the holding companies, including TVSS and SIPL.

The restructuring will give each family group co­mplete ownership of businesses they manage while scrapping the holding company.

According to the new terms, the family has agreed to scrap any cross-holdings.

The restructuring will involve nine listed companies, including TVS Motor, Sundaram Clayton, Sundram Fasteners, TVS Electronics and TVS Srichakra, among others.

The family members will buy out shares of the TVS holding firms in their companies.

This arrangement will not include Sundaram ­­Finance as it is already de-linked from the holding companies.

For example, TVS holding firms presently have about 63.76 per cent in Sundaram Clayton (SCL), holding company of TVS Motor.

According to the scheme, the shares will vest with TVS Investments and Holdings, owned by SCL and TVS Motor Chairman Venu Srinivasan and members of his immediate family.

Also, Sundram Fastners is controlled by senior-most family member and TVS holding company’s chairman Suresh Krishna and his kin.

TVSS and SRW presently hold about 49.53 per cent of the company’s equity shares.

Photograph: Tanushree Punwani/Reuters