Home » A look at TVS Group’s proposed repurchase

A look at TVS Group’s proposed repurchase

The reorganization would lead to a merger and then each business merging into the holding company of the respective family.

Story so far: The TVS group has been in existence for 110 years. Given the interests and priorities in the various businesses in the group and the third and fourth generations of its founder TV Sundaram Iyengar, the family has decided to align the ownership of individual group companies with the respective arms that manage them. A look at the background and some details of the structure:

What is the first phase of the family system?

The family armament is also a piece of the distribution business, which belongs to their part of the overall business, which will be demolished under their ownership as part of the process.

Sources close to the family say that at the end of the family arrangement, there will be no single holding company, but there will be separate holding companies for each of the family branches that have been managing related businesses for decades, sources close to the family he said.

Will there be other agreements that family members will enter into?

In addition, the arrangement will likely see a number of ancillary agreements – for example how the TVS brand will be used in the future, and a non-compete – as the former family has been in decades, sources said. . Partition in our country.

What changes will the group's listed firms witness?

While companies that run the business themselves are not directly part of the family settlement, a change in their holdings will be seen. TVS Motor Company is run by Veenu Srinivasan and his family members. As of the January 27 exchange filing by TVS Motor, TVS Holding Companies holds 63.76% in Sundaram Clayton (SCL), the holding company for TVS Motor.

Similarly, Sundaram Fasteners, run by Suresh Krishna and his family, will be a witness to the business of fasteners from TVS holding companies to TVS Sundaram Fasteners Pvt. Ltd. 49.53% shares held by holding companies in Sundaram Fasteners TVS Sundram Fasteners Pvt. Ltd., in which the family of Shri Krishna holds a majority.

Likewise, k. Mahesh's family runs Sundaram brake linings, in which TVS holding companies hold 32.66%. Post merger of three TVS holding companies, a demerger of the break lining business will have an impact on Madurai Algar Enterprises Private Limited. Ltd. (MAEPL). Therefore, 32.66% of Sundaram brake linings held by holding companies will form with MAEPL, with Mr. Mahesh's family holding a majority.

TVS Investments (TVSI) holds 59.84% in TVS Electronics, run by Gopal Srinivasan and family. TVS holding companies hold 85% stake in TVSI. TVSI will merge with the family holding company Geeses Family Holdings Pvt. Ltd (GFHPL) and stake held by TVS holding companies will vest with GFHPL.

At the end of the exercise, all the shareholders of TVS holding companies will hold equity shares in the respective family holding firms, but the family running the business will have a majority stake in the respective family firms.

How was the ‘fair price' found?

“It is a family settlement – an established principle of law,” sources said. “To maintain family harmony and to ensure that there are no future disputes, you can make a family settlement.” Among relatives by distributing property. There is no purchase or sale of shares. It is not a sale-purchase transaction. There is no share swap, “the sources said, pointing out that it would be difficult to explain ‘fair value' in the family context. “There are a lot of factors and family histories that go into it, so that it is impossible to relate the value of the business to the settlement. It is not that business value does not matter, but it is much more complex right now, ”the sources said.

It is expected that the TVS family arrangement will also include some payments, inter-se among the family branches. Some family members, running businesses that are relatively more successful than others, will pay more cash.

Asked if he would like to comment on the subject of family arrangements, Mr. Suresh Krishna, President, Sundaram Fasteners said, “We have decided in the family that the relevant information about the settlement of the family is in the published material.

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