NCLT Chennai Dispenses With Shareholder Meetings In Ford Motor-Ford India Merger

The National Company Law Tribunal (NCLT), Chennai, has permitted the proposed amalgamation of Ford Motor Private Limited with Ford India Private Limited to move to the next stage.

While dispensing with meetings of equity shareholders of both companies, it directed meetings of unsecured creditors to consider the scheme.

A coram of Judicial Member Sanjiv Jain and Technical Member Venkataraman Subramaniam passed the order on applications filed by the two Ford group entities seeking directions in relation to the proposed scheme of arrangement.

The proposed amalgamation involves Ford Motor Private Limited and Ford India Private Limited, the group's automobile company in India.

The tribunal observed that both companies had only two equity shareholders each and that all of them had furnished consent affidavits.

“Since it is represented that both the Equity Shareholders of the Company have consented by way of affidavits forming 100% value of shareholding and the same are placed on record, convening and holding a meeting for equity shareholders is dispensed with.”, it noted.

The scheme contemplates the merger of Ford Motor Private Limited, the transferor company, into Ford India Private Limited, the transferee company. It provides for the transfer of all assets, undertakings, liabilities, contracts and employees to the transferee company.

According to the applications, both entities are part of the Ford Group and have an identical shareholding structure. Ford Motor Company holds 90% of the share capital in each company, while Ford International Services LLC holds the remaining 10%.

The companies informed the tribunal that the proposed amalgamation would help simplify the organisational and corporate structure within the Ford Group. It would also streamline business operations and decision-making processes, strengthen the financial position of the transferee company and reduce compliance requirements.

The scheme fixes April 1, 2026 as the appointed date. It also proposes a one-to-one share exchange ratio. Under the arrangement, one fully paid-up equity share of Ford India Private Limited with a face value of ₹100 would be issued for every fully paid-up equity share of Ford Motor Private Limited with a face value of ₹10.

The tribunal also noted that neither company had any secured creditors. As a result, meetings of secured creditors were not required.

However, Ford Motor Private Limited had 468 unsecured creditors with claims of about ₹128 crore. Ford India Private Limited had 544 unsecured creditors with claims of about ₹676 crore. The tribunal directed meetings of unsecured creditors of the two companies to be held on July 25, 2026 at 10.30 am and 12 noon, respectively.

“Since it is represented by the Applicant Company that meeting of the unsecured Creditors may be held, this tribunal directs to convene a meeting of unsecured Creditors on 25th July 2026 at 10.30 AM.”, it added.

The tribunal fixed the quorum for the meetings at 47 unsecured creditors in the case of Ford Motor Private Limited and 55 unsecured creditors in the case of Ford India Private Limited. It appointed Raj Singh as chairperson and Kishore P as scrutiniser for the same.

Further directions were issued regarding the service of notices, publication of advertisements in newspapers, and notice to statutory authorities, including the Regional Director, Registrar of Companies, Official Liquidator, and Income Tax authorities.

The applications were accordingly allowed.

For Applicants: Advocates Vinod Kumar and Srinivasan MD, J Sagar Associates