The Shapoorji Pallonji (SP) Group submitted a plan of separation to the Supreme Court on October 29, seeking to end its seven-decade-long association with the Tata Group.
SP Group has in its submission pointed out that Tata Sons is “effectively a two-group company” consisting Tata Trusts, Tata family members and Tata companies with 81.6 percent holding as one party and the Mistry family members with 18.37 percent holding as the second.
SP Group has as such demanded non-cash settlement in form of shares in all listed Tata entities where Tata Sons owns stake – basis pro rata split of listed assets (per known share price value) and pro rata split of brand (as per valuation done and published by Tatas).
The ask would mean that for the Tatas 72 percent ownership in Tata Consultancy Services (TCS), the SP Group's ownership of 18.37 per cent in Tata Sons would entitle them to 13.22 percent stake in TCS worth Rs 1,35,000 crore at present market capitalisation, as per the statement.
“A neutral third-party valuation can be done for the unlisted assets adjusted for net debt. Pro-rata shares of brand value adjusted for net debt can be settled in cash and/ or in listed securities. For the unlisted companies, an expedited valuation can be done with a valuer selected by both sides. This can be settled in cash and/or in listed securities,” it added.
The Mistrys valued their holding in Tata Group at Rs 1.75 lakh crore. The family owns SP Group and has been locked in legal battle with the Tatas since Cyrus Mistry’s unceremonious removal as Tata Group chairman in 2016.
Tata Sons is the core investment company and is the holding company for the Tata Group and its value arises from its stake in listed equities, non-listed equities, the brand, cash balances and immovable assets.
(With inputs from PTI)