Automobile major Hindustan Motors seems to have rounded off 1997-98 with relative consistency in implementing the three-pronged strategy it
had chalked out at the beginning of last year for its various businesses.
The company has already taken requisite steps to begin production of the Mitsubishi Lancer as well as the rural transport vehicle and capacity enhancement of its earth-moving equipment and power product division.
To part-finance the new plans, the company, as promised earlier, has set off the process to augment its authorised share capital by Rs 60 crore to Rs 220 crore and make a public offer of both ordinary shares and/or fully convertible debentures aggregating Rs 54 crore on a rights basis.
The premium amount, ratio and the timing of the rights issue will be decided by the board of directors of the company at a later date.
At a meeting held in Chennai, the company management decided to convene an extraordinary general meeting on May 20 to seek shareholder approval to the proposed rights issue and augmentation of the authorised share capital.
Proceeds of the rights issue will be used to fund the companys on-going Mitsubishi Lancer car project at Tiruvallur in technical collaboration with the Japanese major Mitsubishi Motors Corporation, the rural transport vehicle project in association with Australia-based Oka Motor Company and upgrading the capacity of the earth-moving equipment and power product division.
This apart, Hindustan Motors has already been sanctioned Rs 320 crore as term loans by financial institutions for the purpose.
While full-scale commercial production of the Lancer MG 41 model is expected to begin in July 1998, the rural transport vehicle will be marketed sometime this year.
Besides strengthening of its existing product, the Trekker, which enjoys a good market in the rural areas, the companys three-pronged strategy relating to the earth-moving equipment business, also included increasing the range of products in line with the requirement of the different segments of the market.
