|
Calcutta, Feb. 4: Chandra Kant Birla plans to infuse fresh capital in ailing Hindustan Motors after over a decade as the maker of Ambassador cars strives to strengthen its balance sheet in the face of mounting losses.
The Calcutta-based company said it would issue preference shares worth Rs 14.45 crore to four promoter group companies, while promising to pump in an equal amount by issuing warrants within 18 months.
The preference shares will be issued at Rs 12.25 apiece, including a Rs 7.25 premium over a face value of Rs 5. Each warrant will also be converted into one equity share at the price of Rs 12.25, according to Sebi rules.
Promoters now hold a 27.22 per cent stake in Hindustan Motors. After the completion of the entire transaction, their stake may go up to 36.5 per cent if there is no further dilution. The company’s stock closed at Rs 10 on the Bombay Stock Exchange on Friday.
Industry observers say the development augurs well for the company which has been starved of capital for many years, prompting some shareholders to speculate that the promoter wasn’t doing enough to revive the company that failed to cash in on the boom in the automobile industry over the last decade.
The Rs 28.90-crore infusion comes at a time the Bengal government tightened its noose around Hindustan Motors for not ploughing back enough to its Uttarpara plant.
The erstwhile Buddhadeb Bhattacharjee government had allowed the company to transfer a 314-acre plot, 40 kilometres from Calcutta, to rake in Rs 285 crore.
HM’s actual investment in terms of capital expenditure was only Rs 20 crore in the Uttarpara plant from 2006 till August 2011, as disclosed in the annual general meeting of the company then.
MD quits
Manoj Jha, who joined the auto maker in May 2010 as the managing director, put in his papers on January 31, 2012. Former managing director A. Shankara Narayanan, who is on the company’s board at present, will be holding his office till a new candidate is selected.
|
