Bajaj Auto to list new companies in April

Bajaj Auto to list new companies in April
21 Feb, 2008, 1236 hrs IST, PTI

MUMBAI: Bajaj Auto Ltd, India's second-biggest motorbike maker, said it has completed the separation of its finance operations into a new company that it expected to list on the stock exchange by the end of April.

As part of the restructure, Bajaj Holdings & Investment Ltd, a new holding company which holds 30 percent of both Bajaj Auto and the spun-off Bajaj Finserv Ltd, will also be listed at the same time. Shareholders in Bajaj Auto will be entitled to receive one share each in the two new companies for every share held.

Bajaj said the spin-off took effect on Wednesday after the plan, which was announced last May, was approved by a Mumbai court this week. Bajaj Finserv includes the Bajaj group's insurance ventures and finance business Bajaj Auto Finance, as well as wind energy generation. It will receive up to 8 billion rupees ($200 million) in cash and equivalents from Bajaj Auto.

Bajaj Holdings & Investment Ltd has Bajaj's existing manufacturing and gets 15 billion rupees. It would focus on new business opportunities. In recent years, the value of some Indian firms that have been spun-off has exceeded the value of the company before the split.

Shares in Bajaj Auto, which has a market worth of about $6 billion, on Thursday were trading close to their levels of last May, when they fell sharply on concerns about options for Germany's Allianz to lift its stake in its two insurance ventures with the firm.

Allianz has an option to increase its stake in the general and life insurance ventures with Bajaj from the current limit of 26 percent if government regulations change.