Bajaj Electricals Ltd said on Thursday its board had approved a review of its corporate structure, including a decision to separate its vertical power transmission and distribution business into an independent entity.
The company — which is in consumer product segments such as home appliances, fans and consumer lighting products; and the Engineering Procurement and Construction (EPC) segment which includes power transmission, power distribution and lighting projects – said it would explore a full range of options and alternatives, including the demerger, spin-off and strategic partnerships.
The milestone has been taken given the varied nature and potential opportunities of each of the business segments and the need for a focused approach to unlocking these opportunities, Bajaj Electricals Ltd (BEL) said in a statement.
The board, at its meeting held on Thursday, authorized management to “evaluate and recommend such options and alternatives, and subject to such detailed evaluation, to consider hosting the transmission and distribution of electricity as an autonomous/independent legal entity,” he added.
BEL’s Chairman and Managing Director, Shekhar Bajaj, said: “Over the past two years, the power transmission and distribution verticals have sharpened their operational focus, securing project closures, increasing cash flow, debt reduction and major debt repayment, while simultaneously focusing on health and safety and ESG in general”.
He further stated, “We believe the time is now right to build on this momentum and review our structures to enable unconstrained business growth for every business segment.”
The objective of the exercise, as defined by its board of directors, includes the rationalization of the structure of the company to improve market positions, ensure long-term growth, a tailored capital structure and allocation policies based on company-specific dynamics, the company said.
The company also intends to appoint various advisers or consultants to help the board assess options and complete the process to consider the way forward as soon as “practically” possible.
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