Tata Motors has been in focus lately ahead of the demerger taking effect on October 1. In the recent weeks the company has seen several key developments including leadership changes, Jaguar Land Rover (JLR) securing loan and grappling with the impact of the recent cyber attach. Here are the top drivers for the company-
1. Demerger effective from October 1
Tata Motors has confirmed that the scheme of arrangement for the demerger of its commercial vehicles business has been approved and will become effective on October 1.
Under the scheme, shareholders of Tata Motors will receive one share of Tata Motors Commercial Vehicles for every share they hold in Tata Motors. The company said it will announce the record date separately.
2. Management change at Tata Motors
Tata Motors also announced leadership changes. Shailesh Chandra has been appointed Managing Director and CEO of Tata Motors for a three-year term starting Oct 1. Chandra currently leads the company’s passenger vehicles and electric mobility businesses and will continue to oversee the EV segment.
Dhiman Gupta has been named the new Chief Financial Officer, replacing P.B. Balaji. Balaji, who resigned as Group CFO, will take over as the new CEO of Jaguar Land Rover, subject to shareholder approval.
Girish Wagh has resigned as Executive Director and KMP of Tata Motors. Wagh will join the board of TML Commercial Vehicles Ltd as Managing Director and CEO from Oct 1.
3. UK government offers £1.5 bn loan guarantee to JLR
The UK government has stepped in to support Tata Motors-owned Jaguar Land Rover after a cyber-attack forced the carmaker to halt production earlier this month. The UK government announced a loan guarantee of up to £1.5 billion to help the company secure funds from commercial banks and protect its supply chain. The guarantee comes under the Department for Business and Trade’s Export Development Guarantee, backed by UK Export Finance. The loan will be repayable over five years.
4. JLR cyberattack halts production across global plants
The cyber attack on August 31 forced JLR to suspend production at its UK factories, including plants in Solihull and Wolverhampton in the West Midlands, Halewood in Merseyside, as well as facilities in India, Slovakia and China.
The prolonged shutdown has hit small and medium-sized suppliers hard, with many reporting cash flow issues, reduced staff hours, and even redundancies.
According to a Reuters, JLR said it has begun a phased restart of its IT systems, and its teams are working around the clock with cyber experts, the UK’s National Cyber Security Centre, and law enforcement agencies to bring operations fully back online in a safe and secure manner. Production is not expected to resume until October.
5. Independent directors step down at JLR
The board said that three independent directors — Hanne Sorensen, Kosaraju Veerayya Chowdary, and Guenter Karl Butschek — are going to step down from Tata Motors. Their resignations will be effective between Sept 30 and Oct 1.
While Sorensen will continue on the board of JLR, Chowdary and Butschek will move to the board of TML Commercial Vehicles, the new listed entity.
The company has appointed Sudha Krishnan, a former Indian Audit and Accounts Service officer, as an additional independent director for a term of five years beginning Oct1.