Hindustan Motors, the beleaguered maker of the Ambassador car, has disposed of its entire land holding of about 120 acre at Halol in Gujarat to avoid turning into a potentially sick company.
The CK Birla-group company sold off around 120 acres in Gujarat’s industrial estate in tranches, first in March and then in the first quarter, garnering about Rs70 crore, chief financial officer Yogesh Goenka, said on Thursday.
“During 2010-11 and in the first quarter, we have sold off our land at Halol,” chairman CK Birla told reporters after the annual general meeting of the company.
In March Hindustan Motors got Rs24 crore while in the April-June it received Rs47 crore, helping the company report a profit of Rs22.47 crore in the first quarter of 2011-12 against a loss of Rs20.73 crore in the corresponding period previous fiscal.
Hindustan Motors had been present in Halol since the 80s when it used to make 3-5 tonne Isuzu trucks. The production stopped in 1992, but the company then entered into a joint venture in 1994 with General Motors to make Opel Astra cars. GM subsequently bought the Halol plant from HM in 1999.
Apart from the land, HM has been disposing of its strategic investment in auto-component maker Avtec to other group outfits.
Avtec was formed by hiving off HM’s auto component business into a separate company, in which private equity firm Actis holds 30%.
Avtec was formed by hiving off HM’s auto component business into a separate company, in which private equity firm Actis holds 30%.
In 2010-11 HM sold 62,18,000 shares or almost half of its 1.22 crore shares in unlisted Avtec.
Its balance holdings of 60,32,000 shares as on March-end are valued at `34.02 crore or about `56.40 a share at cost value.
With this, HM’s holding in Avtec has done down from 49% to 24.13%.
With this, HM’s holding in Avtec has done down from 49% to 24.13%.
The CK Birla Group continues to hold 70% stake in Avtec through group companies like HM, Hyderabad Industries Ltd and Orient Paper Ltd.
“HM will stay invested in Avtec in whatever shape it may be,” Birla said. HM will soon launch a 0.8 tonne pick-up vehicle as well as a 7-9 seater commercial passenger carrier on the Ambassador platform, Birla told shareholders, confirming a recent DNA report.
The variants would be launched within a fortnight, a company spokesperson later said.
The variants would be launched within a fortnight, a company spokesperson later said.
“Work in on in collaboration with a European company to develop a euro IV complaint diesel engine on CRDI platform which is imperative to revive, sustain and boost sales of Ambassador, Winner and their variants that have been running on the HM plus engine for long,” Birla said.
Birla denied reports that HM had allegedly understated by `200 crore the sale of excess land at its factory site in 2007.
“The total amount at which we had sold our land to Shriram Properties had been disclosed to the state government. They have been asking for clarifications and we have been providing them,” Birla told reporters.
“The total amount at which we had sold our land to Shriram Properties had been disclosed to the state government. They have been asking for clarifications and we have been providing them,” Birla told reporters.
The West Bengal government, the reports said, was informed of only Rs85 crore projected revenue from the sale of 314 acre at its Uttarpara plant to Shriram Properties for development of a township while the actual deal value was Rs285 crore.
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