Calcutta, Jan. 4: The board of Hindustan Motors will meet on January 10 to consider a restructuring exercise.
In a filing to the Bombay Stock Exchange, the maker of the Ambassador said, “A meeting of the board of directors of the company will be held on January 10, 2013, inter alia, to consider restructuring of the company.”
Company officials, however, remained tight-lipped on their plan. “The board will meet in Delhi to consider a restructuring of the company. However, at this point I will not be able to comment on this,” managing director Uttam Bose said.
The loss-making car maker had last undertaken restructuring in 2010 when it wrote off a security premium of Rs 3.17 crore and halved the paid-up share capital by reducing the value of each share to Rs 5 apiece from Rs 10. The company adjusted both amounts against debit balance in its profit and loss account.
The restructuring helped to arrest the erosion of the company’s net worth and saved it from being reported to the Board for Industrial and Financial Reconstruction.
For the six months ended September 30, 2012, the company has suffered a net loss of Rs 65.59 crore against a loss of Rs 5.16 crore in the same period a year ago.
An upgraded Ambassador or the growth in sales of the Winner minitruck could have revived the bottomline in the second half of the fiscal, but the chances seem limited.
Hindustan Motors diversification into component manufacturing, primarily castings, forgings and stamping, is also aimed at generating substantial income.
The company, which has a technical tie-up with Mitsubishi Motors Corporation, assembles the latter’s cars in its Chennai plant. The Japanese partner had reportedly indicated its keenness to pick up a stake.
HM’s scrip today rose 1.21 per cent to Rs 10.01 at the end of trade on the BSE.