TVS family kick-starts rejig process, to file composite scheme of arrangement at NCLT

By: |
January 28, 2021 3:45 AM

The $8.5-billion, Chennai-based TVS Group had on December 10, 2020, embarked on a restructuring exercise whereby each family group would get complete ownership of the companies they manage and the holding company structure would be abolished.

Motorcycle sales grew by 31% to 4.26 lakh units from 3.25 lakh, while scooter sales grew 11% to 3.11 lakh units from 2.80 lakh.Motorcycle sales grew by 31% to 4.26 lakh units from 3.25 lakh, while scooter sales grew 11% to 3.11 lakh units from 2.80 lakh.

The senior nominated members of the Chennai-based TVS Group family have on Wednesday decided to implement the memorandum of family arrangement (MFA), through a composite scheme of amalgamation and arrangement to be filed with the National Company Law Tribunal, (NCLT) Chennai Bench.

The $8.5-billion, Chennai-based TVS Group had on December 10, 2020, embarked on a restructuring exercise whereby each family group would get complete ownership of the companies they manage and the holding company structure would be abolished.

The TVS family has been engaged, for more than a century, in a diverse range of businesses through various entities in which the branches of the TVS family have invested in or through TV Sundram Iyengar & Sons, Sundaram Industries and Southern Roadways collectively called as TVS holding companies. The MFA will include an amalgamation of T V Sundaram Iyengar & Sons, Sundaram Industries, Southern Roadways and TVS Sundaram Fasteners.

Under the new structure, though each branch of the family would become independent and manage the businesses they are running, the terms of the family arrangement do not envisage any royalty or brand usage payments from the operating businesses/companies to the TVS family members/their holding companies.

The memorandum of family arrangement (MFA) of December 10, 2020, had been executed amongst various members of the TVS family who are shareholders of T V Sundaram Iyengar & Sons (TVSS), Sundaram Industries (SIPL) and Southern Roadways (SRW) — collectively referred to as the TVS holding companies.

Post the MFA, senior members of the TVS family were nominated to deliberate on the implementation of the family arrangement. “On January 27, 2021, the senior nominated members of the TVS family have decided to implement the family arrangement, through a composite scheme of amalgamation and arrangement to be filed with the NCLT, Chennai bench involving the TVS holding companies and T S Rajam Distribution Services (TSRDSPL), Sundram Fasteners,” said in a regulatory filing.

The present shareholders of the TVS holding companies primarily consist of the third and fourth generations of the founder, T V Sundaram Iyengar. The various companies/ businesses of the TVS Group have been traditionally managed by members of the different branches of the TVS family. Over 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 the respective companies/ businesses, as is currently being done. The family arrangement under the MFA is envisaged primarily to bring about amity and maintain goodwill amongst the members of the TVS family to preserve the memories of the founder TV Sundaram Iyengar, and to maintain the overall peace and harmony within the TVS family.

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