The CK Birla group has acquired Hindustan Motors Finance Corporation Ltd (HMFCL), a wholly-owned subsidiary of the ailing automaker Hindustan Motors Ltd.
“This move signifies that CK Birla, who has already resigned from the board of Hind Motors, will now control HMFCL,” said a person aware of the development.
In a statement to stock exchanges, Hind Motors said on Monday it handed over the possession of the Chennai car plant to HMFCL on Sunday without making any reference to its ownership change.
The company added that the necessary approvals of the lenders and the Tamil Nadu Government with respect to the transfer and other necessary approvals “are under process”.
Earlier, Hind Motors had said it expected to raise at least ₹150 crore by disposing of the Chennai plant.
The board formally proposed the sale at a price based on valuation reports of independent advisers Senthil Associates and CR Narayana Rao LLP as well as the fairness opinion by the merchant banker, VC Corporate Advisors, Kolkata.
The company was also referred to the Board for Industrial and Financial Reconstruction for sick company status.
In a proposal to the shareholders for a postal ballot, which closed on February 1, seeking permission for the sale of the asset, the company said the consideration “shall not be less than ₹150 crore”.
The plant is located in the Thiruvallur district of Tamil Nadu.
The company had also proposed to sell a part of the Uttarpara facility – the forge and foundry shops in West Bengal.
The consortium of lenders led by ICICI Bank holds 14.22 per cent of the promoters’ stake.