Our Bureau

Chennai , Oct. 17

TVS Motor Company on Friday announced a stock-split — the company's Rs 10-share is to be sub divided into equity shares of a face value of Re 1 each.

The stock-split will enhance liquidity, making trading easier, the company's Chairman and Managing Director, Mr Venu Srinivasan, told presspersons here on Friday.

The proposal, cleared by the board, will be implemented after the company get the shareholders' approval, at a meeting to be convened for that purpose. That the company might go in for a stock split was hinted at by Mr Venu Srinivasan at the company's annual general meeting last month. The TVS Motor share today closed at Rs 892, after reaching a high of Rs 907, on the NSE.

It is understood from company sources that although technically 42 per cent of the company's stock comes under `public holding', only 15-20 per cent is actively traded. The stock split will generate (ten times) more shares, and more investors would be able to participate in trading.

Meanwhile, TVS Motor's Board also decided that the company's subsidiary, Lakshmi Auto Components (LAC) would be merged with TVS Motor. Shareholders of LAC would get one share of TVS Motor for every seven held of LAC. The exchange ratio was arrived at as per the advice of consultants, Deloitte, Haskins & Sells.

As per the proposed scheme of amalgamation, the rubber and plastics business of LAC would be transferred to LAC's subsidiary, Sundaram Auto components Ltd, on a "slump sale basis" for a consideration of Rs 12.25 crore.

The engine components division, together with other investments and assets of LAC would be merged with TVS Motor Company.

The appointed date for transfer of undertaking if rubber and plastics business of LAC to SACL is April 01, 2003.

The appointed date for amalgamation of the engine components division with TVSM is April 02, 2003.

The consideration for the transfer of undertakings of rubber and plastic businesses of LAC to SACL will be by way of allotment of 24,50,000 equity shares of Rs 10 each at a premium of Rs 40 per share, credited as fully paid.

The scheme of amalgamation will come into effect upon approval of the scheme by the shareholders, and by the Madras High Court.