Boards of HV Transmissions and HV Axles propose amalgamation

The Boards of HV Transmissions Limited (HVTL) and HV Axles Limited (HVAL) have decided to amalgamate HVTL into HVAL to harness synergies and graduate the two entities as a total driveline solutions provider, backed with appropriate skills and expertise. With the pooling and more efficient utilization of resources, the amalgamated company, proposed to be renamed ‘TML Drivelines Limited’, will emerge as a stronger company. Subject to approvals of shareholders (Tata Motors and Tata Capital respectively hold 85% and 15% equity each in the two companies) and statutory approvals, the amalgamation will be effective from April 1, 2011. The facilities of the two companies are located in Tata Motors’ Jamshedpur plant complex, and they already function with great degree of commonalities. The amalgamation will ensure complete harmony, optimal utilisation of resources and integrated R&D base to create new products to respond to emerging market opportunities. The new entity will operate with two business verticals, Transmissions and Axles, with common corporate functions. The amalgamation will not result in any redundancies. Terms and conditions of employment will remain unchanged. HV Transmissions is currently engaged in manufacturing of gear boxes and gear box parts while HV Axles manufactures axles and axle parts for medium and heavy commercial vehicles (M&HCV) segment. The major customer of the two companies is Tata Motors. During 2009-10, HVTL and HVAL reported a turnover of Rs.209.84 crore and Rs.240.15 crore respectively and profit after tax (PAT) of Rs.52.64 crore and Rs.63.85 crore respectively. During the first nine months of 2010-11, HVTL and HVAL reported a turnover of Rs.205.41 crore and Rs.221.14 crore respectively and PAT of Rs.58.70 crore and Rs.64.93 crore respectively.