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Hindustan Motors is exiting its restructured debt obligation by paying ₹49.48 crore and issuing equity shares and non-convertible debentures (NCDs) to lenders.
The company that has been referred to the Board for Industrial and Financial Reconstruction (BIFR) is planning to issue fresh shares worth ₹22.55 crore and non-convertible debentures worth ₹20.53 crore.
The board of directors will approve the allotment on September 29. These instruments will be issued to the banks and financial institutions on a preferential basis. This follows the corporate debt restructuring empowered group’s approval of the company’s exit plan on June 28. The debentures would be secured by mortgage of assets of the company’s Uttarpara plant in West Bengal.
The company, which used to make the iconic Ambassador cars, sold its profitable Chennai plant, producing Mitsubishi vehicles and under contract manufacturing agreement with Isuzu, to a promoter outfit in March for ₹150 crore.
Hindustan Motors’ paid up capital (as on March 31) is ₹92.47 crore. Promoters hold 22 per cent of it.
Incidentally, the company was referred to the BIFR in February. Since May, Hindustan Motors imposed work suspension at its Uttarpara plant. The unit employed around 2,600 regular and contract workers. It had reportedly sacked 240 managerial staff.
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