CK Birla Group company Hindustan Motors is in the process of getting approvals from lenders and Tamil Nadu government for proposal to handover the possession of its Chennai Car plant to a separate entity - Hindustan Motor Finance Corporation - as part of plans to cut losses.
In supersession of January 5, 2014 Working Arrangement Agreement, the company had handed over possession of the car plant at nearby Adigathur to Hindustan Motor Finance Corporation Limited, the company said in a BSE filing.
"The necessary approvals of the lenders and the Tamil Nadu Government with respect to the transfer and other necessary approvals as may be required are under process", it said.
Early this year, the shareholders of the Kolkata-based company gave their nod for raising about Rs 150 crore by means of sale or lease of the car plant.
The troubled car maker has been witnessing huge losses and the business of the company was in "strain" due to lower sales volumes.
The company was looking at cutting losses by demerger of Chennai plant to a separate company -- Hindustan Motor Finance Corporation Ltd.
Hindustan Motors currently has two facilities -- one at Uttarpara in West Bengal and Chennai plant.
While the company manufactures the famous Ambassador and light commercial vehicle Winner at Uttarpara, it makes premium SUV Pajero Sport, premium sedan Cedia, and luxury SUVs Outlander and Montero, at the Chennai plant, in collaboration with Japanese automaker Mitsubishi Motors.
Japanese car maker Isuzu Motors entered into a contractual agreement with Hindustan Motors for contract assembling of Completely Knocked Down (CKD) units of Isuzu's sports utility vehicle MU-7 and pick-up truck D-Max from the Chennai plant.
