BAL board approves demerger scheme

Mumbai, May 17 (UNI) The Bajaj Auto Limited (BAL) board, which met today, unanimously approved the Demerger Proposal.

The demerger will come effective from March 31, 2007. The demerger involves separation of the two-wheeler and three-wheeler manufacturing segments of Bajaj and its financial businessess.

The sectors comprising the generation of wind energy using wind farms, and the insurance business conducted through its joint ventures Bajaj Allianz Life Insurance Company Ltd and Bajaj Allianz General Insurance Company Ltd., would be transferred to two newly incorporated subsidiaries, Bajaj Holdings and Investment Ltd (BHIL) and Bajaj Finserv Ltd (BFL).

As per the scheme, the Manufacturing Undertaking shall remain in BHIL and Strategic Business Undertaking shall vest in BFL.

The demerger will be subject to all the requisite statutory, regulatory and corporate approvals, including approvals of the Reserve Bank of India (RBI), stock exchanges, the respective boards and shareholders.

After the demerger, each shareholder would, for every share held in the Company, continue to hold one share of the Company of face value of Rs 10 each fully paid up.

These shareholder will be allotted one share of BHIL of face value of Rs 10 each fully paid up and one share of BFL of face value of Rs 5 each fully paid up, the Company said in a disclosure it had made to the Bombay Stock Exchange (BSE).

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

The Scheme as cleared by the Board is subject to approvals as may be required including that of the stock exchanges, Bombay High Court, and shareholders of the Company.

UNI