HMT shares today hit the upper circuit filter of 20 per cent on news that the company has invited expressions of interest (EoIs) for its disinvestment initiative in four subsidiaries. The shares of the diversified state-run company closed at the upper circuit level of Rs 27.05 amid a volume of 3.35 lakh shares on BSE. The stock has jumped almost 200 per cent since May 8 when it was quoted at Rs 7.70.
HMT put up newspaper advertisements today inviting strategic partners for acquiring up to 74 per cent stake in four of its subsidiaries. The last date for submitting EoIs is August 2, 2002. The four arms being put up for sale are HMT Machine Tools, HMT Watches, HMT Bearings and HMT Chinar Watches.
The stakes will be sold off along with the relinquishing of management control. The entire disinvestment in the four subsidiaries will be completed by October 2002.
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Meanwhile, the government has mandated international consultancy major Ernst & Young to act as advisor for the disinvestment in HMT. In 2000, the government had approved a revival and restructuring package for the company involving conversion of a Rs 39.7 crore loan into equity along with a waiver of Rs 12.7 crore due as interest on loans.
The package also envisaged a one-time budgetary support of Rs 15.7 crore along with a cash infusion, which was to the extent of Rs 250 crore and effected in June 2000.
Along with the revival package, it was recommended that the Aurangabad, Guwahati and Hyderabad units of the ailing PSU should be closed and the watch factory should be converted into a subsidiary. A voluntary retirement scheme was also proposed.
Incorporated in 1961 by the Government of India, HMT has N Ramanuja as chairman and managing director. The company is engaged in the manufacture of machine tools, industrial machinery, watches, lamps, tractors and printing machines.
For the third quarter ended December 31, 2001, HMT registered a Rs 9.37-crore net loss on a 27 per cent fall in net sales to Rs 59 crore. As on March 31, 2002, the promoter