Bajaj Auto's Board approves demerger, profit dips

New Delhi, May 17 (UNI) Country's second largest two-wheeler maker Bajaj Auto Ltd's Board today approved a scheme to split its automotive business and financial operations, including Bajaj Allianz insurance and its non-banking operations into two separate entities.

Meanwhile, the company's net profit fell 11 per cent at Rs 308.31 crore for the fourth quarter ended March 31, 2007 as against Rs 346.97 crore during the same quarter a year ago.

The demerger of the company's two and three-wheeler manufacturing undertaking and strategic businesses, including the generation of wind-energy, insurance business and others will now be incorporated into two subisidiaries, Bajaj Holdings and Investment Ltd (BHIL) and Bajaj Finserv Ltd (BFL).

While the manufacturing business will vest in BHIL its strategic undertaking will be held by BFL, a statement said.

As part of the restructuring, BHIL will be renamed as 'Bajaj Auto Ltd (BAL)' and the existing Bajaj Auto Ltd shall be christened as 'Bajaj Holdings and Investment Ltd'.

Post-demerger, shareholders will get one share of Bajaj Holdings, Finserv for every one held.

The demerger has been announced considering the growth opportunities in the auto, wind-energy, insurance and finance sectors to enbale them to work under separate entities, each of which can focus on these core businesses and strengthen competencies.

The demerger will create three separate entities focusing on auto business, wind-energy generation, insurance, consumer finance and new initiatives in financial services space and new business opportunities.

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