Monday, May 21, 2007

Bajaj announces demerger into 3 new entities

After much speculation of a demerger, one to the effect was finally anounced on 17th May. The Bajaj’s business will be rolled off into 3 new companies with the existing Bajaj Auto Ltd continuing as the holding company which will also have a mammoth Rs 6,000 crore in cash.

Under the new scheme of arrangement the auto businesses will come under the Bajaj Holdings and Investments Limited (BHIL),it will also have 1,500 crore in cash and the Financial services company which includes a joint venture with the UK insurance major Allianz will continue operations under as Bajaj Finserv (BFL).It also includes consumer finance, windpower projects and Rs 800 crore in cash.

Rajiv Bajaj will continue as the MD and CEO of BHIL whereas Sanjiv will manage BFL and remain the Executive Director of BHIL. Rahul Bajaj will remain the chairman of all the three companies.The board of the two new companies will have four members comprising Rahul,Madhur,Rajiv and Sanjiv Bajaj. However the BAL board will not be tampered with.

Source: The Economic Times,

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