Hindustan Motors rose 3.03% to Rs 8.17 at 9:19 IST on BSE after the company on Thursday, 26 December 2013 at its 71st annual general meeting announced business restructuring plans.
The announcement was made after market hours on Thursday, 26 December 2013.
Meanwhile, the S&P BSE Sensex was up 58.87 points or 0.28% at 21,133.46.
On BSE, so far 90,000 shares were traded in the counter as against average daily volume of 2.89 lakh shares in the past one quarter.
The stock hit a high of Rs 8.39 and a low of Rs 8.05 so far during the day. The stock had hit a 52-week high of Rs 13.19 on 8 January 2013. The stock had hit a 52-week low of Rs 6.04 on 7 August 2013.
The stock had outperformed the market over the past one month till 26 December 2013, advancing 5.03% compared with the Sensex's 3.18% rise. The scrip had, however, underperformed the market in past one quarter, declining 8.22% as against Sensex's 5.94% rise.
The small-cap company has equity capital of Rs 92.39 crore. Face value per share is Rs 5.
Hindustan Motors (HM) said that it is putting in all efforts to strengthen the company through restructuring.
Speaking after the company's 71st annual general meeting, Mr. Uttam Bose, Managing Director and CEO, Hindustan Motors said, "HM remains fully committed to its revival plan. Slowdown in the economy, especially in the auto sector has affected HM too. In addition, we have had operational challenges in terms of cash flow problems for the company. Under these circumstances, it is becoming extremely challenging to manage daily operations".
Mr. Bose said that as decided earlier, HM needs to restructure its business by demerging its Uttarpara and Chennai plants as the product portfolio and customer segment of these two units are very different. The company is seeking potential strategic/financial investors for both the units. It is already in talks with some of them. However, the potential partners, too, have specific needs and are interested in either of the two units, not both, he said.
Mr. Bose further said that the company is facing challenges in executing its revival strategy. In view of the delay in the demerger scheme awaiting the High Court's sanction, the company is initiating divestment of the Chennai plant to meet the goal. In the interim period, the company plans to have a working arrangement for the Chennai plant. HM is in discussions with different entities involved and hopes for strong support from the West Bengal government which is equally interested in reviving Hindustan Motors. "We have a common objective in reviving the organisation and bringing it back to black", he asserted.
During the 18-month period under review, beginning April 2012 and ending September 2013, HM incurred a loss of Rs 71.20 crore as compared to a loss of Rs 29.96 crore in FY 2011-12. The company's accumulated losses have exceeded its net worth at the completion of the financial year ended 30 September 2013. The company will take necessary steps to comply with the legal requirements, the statement said.
Hindustan Motors' board of directors at a meeting held on Thursday, 26 December 2013, inter alia approved the withdrawal of the petition filed before the High Court at Calcutta for sanction of scheme of arrangement between the company and Hindustan Motor Finance Corporation and their respective shareholders due to various developments and changes which have taken place without the scheme having come into effect since its filing.
The Board approved the entering into a working arrangement with Hindustan Motor Finance Corporation (HMFCL), subject to necessary approvals, if any, whereby HMFCL will be entitled to use and operate Chennai Car Plant of the company at Adigathur in Tamil Nadu and to use its infrastructural facilities thereat.
The Board further approved divesting of the whole or substantially the whole or part of Chennai Car Plant of the company at Adigathur, Kadambathur in the District Tiruvallur in Tamil Nadu which is engaged in the business of manufacture and trading of passenger vehicles like Cedia, Pajero, Pajero sport, Montero and Outlander brands of passenger Cars and spare parts of the same in technical collaboration with Mitsubishi Motors Corporation, Japan and also engaged in contract manufacturing of vehicles for Isuzu Motors India as a going concern, subject to necessary approvals and consents of the shareholders, lenders, authorities and other concerned parties, in such manner and on such terms and conditions as may be mutually agreed between the company and any interested party.
The company's board also approved making reference to Board of Industrial and Financial Reconstruction under Section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985(SICA) as the company has, prima facie, become a sick industrial company within the meaning of Section 3(1)(o) of SICA as per the duly Audited Accounts of the company for eighteen month period ended 30 September 2013, adopted at the annual general meeting of the company held on Thursday, 26 December 2013.
Hindustan Motors reported a net profit of Rs 0.29 crore in the quarter ended 30 September 2013 as against net loss of Rs 30.10 crore in the quarter ended 30 September 2012. Net sales declined 21.5% to Rs 102.99 crore in the quarter ended 30 September 2013 over the quarter ended 30 September 2012.
Hindustan Motors (HML) manufactures the Ambassador (1500 and 2000 cc diesel, 1800 cc petrol, CNG and LPG variants) in the passenger car segment, light commercial vehicle 1-tonne payload mini-truck Winner's 1.5 litre and 2 litre diesel versions and a CNG version of Winner and auto components at its Uttarpara plant. The company also runs operations at Pithampur near Indore in Madhya Pradesh where in it produces Winner.
Powered by Capital Market - Live News
