Tata Passenger Electric Mobility Limited (TPEML), a subsidiary of Tata Motors Ltd, has signed an agreement with Ford India Private Limited (FIPL) for the acquisition of its manufacturing plant at Sanand, Gujarat for Rs 725.7 crore.
This Unit Transfer Agreement (UTA) includes entire land and buildings, vehicle manufacturing plant along with machinery and equipment, and the transfer of all eligible employees of FIPL’s vehicle manufacturing operations at Sanand, said a statement.
FIPL will continue to operate its Powertrain Manufacturing Facility by leasing back the land and buildings of the Powertrain Manufacturing Plant from TPEML on mutually agreed terms. TPEML has agreed to offer employment to the eligible employees of FIPL’s Powertrain Manufacturing Plant in the event of FIPL’s cessation of such operations, the release added.
The closure of the transaction will be subject to the receipt of relevant approvals from the government authorities and fulfilment of customary condition precedents. The government of Gujarat, TPEML and FIPL had already executed a tripartite MoU on May 30 to support all relevant approvals for the transaction.
“With our manufacturing capacity nearing saturation, this acquisition is timely and a win-win for all stakeholders. It will unlock a state-of-the-art manufacturing capacity of 300,000 units per annum which is scalable to 420,000 units per annum,” the company stated.
TPEML would make the necessary investments to reconfigure the plant to adapt to Tata Motors’ existing and future vehicle platforms. The unit is adjacent to the existing manufacturing facility of Tata Motors Passenger Vehicles Limited at Sanand, which should help in a smooth transition.
“The agreement with FIPL signed today is beneficial to all stakeholders and reflects Tata Motors strong aspiration to further strengthen its market position in the Passenger Vehicles segment and to continue to build on its leadership position in the Electric Vehicle segment,” said Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles Limited and Tata Passenger Electric Mobility Limited.
“It will accelerate the growth and development of the Indian auto industry by taking a progressive step forward towards building a future ready Atmanirbhar Bharat,” said Chandra.
Steve Armstrong, Transformation Officer of Ford Motor Company, said: “Today’s announcement marks an important step forward in Ford’s ongoing business restructuring in India, which is part of our Ford+ plan for strategic transformation. With the transfer of employment for eligible vehicle manufacturing employees included in the agreement, this milestone also highlights our best effort in caring for those impacted by the restructuring.”