TVS Group's Restructuring A Benchmark for Family Arrangements

"Part I of the scheme, although complex with multiple transactions, executed to achieve separation of ownership between various family branches"

- Anirudha Jain

Recently, TVS Holdings Limited announced completion of its demerger of non-ferrous gravity and pressure die castings business along with the amalgamation of its holding company & other group entity. The entire transaction was highly intricated however, was so perfectly aligned & executed in accordance with commercial understanding.

Most family arrangement becomes complicated when you have companies both private and listed involved as part of transaction however recent implementation of family arrangement of TVS group clearly stands exception to this. Despite having multiple businesses & family tranches, the entire scheme of things being executed without any significant hurdle.

The family arrangement is being carried by way of two key transactions: 

First, mega restructuring involving 14 companies (with multiple demergers & mergers) being executed through a single composite scheme

Second being complex restructuring carried by listed TVS Holdings Limited which facilitated merger of group entity & holding company along with demerger of non-ferrous gravity and pressure die castings business 

Though, the second part is with respect to only one of the family members of TVS group and being executed independently with listed entity involvement, one may believe that the same was executed as integral part of the larger family arrangement as TVS Holdings Limited being the largest part of TVS entity (TVS Holdings Limited is holding 50.26% equity interest of TVS group's flagship company TVS Motors Company Limited)

TVS Holdings restructuring was not only to pave the way for separation of TVS  Motors ownership from non-ferrous gravity and pressure die castings business, but it also effectively parked the consideration payable by the T.S. Srinivasan family to other members into a listed company for getting the sole control of the flagship business.