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Old 11th January 2013, 09:14   #1
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Default Hindustan Motors restructures; Mitsubishi-making Tiruvallur unit Demerged!

Hindustan Motors has decided to demerge its Tiruvallur CPP unit as a going concern to HMFC (Hindustan Motors Financial Corporation). Post restructuring HM will concentrate on its flagship Ambassador (Uttarparra plant in WB) and Winner (Pithampur plant near Indore, MP).

Quote:
HM board met in New Delhi on Thursday and approved the company's proposal to restructure itself. The board also approved the company's scheme of arrangement entailing segregation and realignment of CCP business unit at Tiruvallur as well as other business units in two different entities.

The move is expected to help HM and HMFC to pursue and accelerate their respective growth plans.

Post demerger, Hindustan Motors will manage its Uttarpara plant which manufactures the iconic Ambassador cars including 1500 and 2000 cc diesel, 1800 cc petrol, CNG and LPG variants, light commercial vehicle (1-tonne payload mini-truck Winner 1.5 lt. and 2.0 lt. diesel) and Winner 1.8 lt. CNG, and auto components. It will also have run Pithampur unit near Indore in Madhya Pradesh which produces both variants of Winner.

The Chennai unit at Tiruvallur manufactures Pajero SFX (2002), Cedia (2006), Montero (2009), Outlander (2010) and Lancer Evolution X in 2010 and Pajero Sport as per the technical collaboration between HM and Mitsubishi Motors Corporation of Japan.

In consideration of the demerger, HM shareholders will get one equity share of Rs 5 each of HMFC for every thirteen equity shares of Rs 5 each held by them.
So finally Mitsubishi will be able to breath free in India.

Source: http://economictimes.indiatimes.com/...w/17971360.cms

@Mods: Please merge with an appropriate thread if required. Thanks.
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Old 11th January 2013, 09:46   #2
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Default re: Hindustan Motors restructures; Mitsubishi-making Tiruvallur unit Demerged!

What does this actually mean?
HMFC is a Mitsubishi owned company?
If not, how will Mitsu breath free?


And what a dispassionate name this - "Hindustan Motors Financial Conrportation" - for the unit that makes EVO-X and the likes
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Old 11th January 2013, 13:10   #3
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Default Re: Hindustan Motors restructures; Mitsubishi-making Tiruvallur unit Demerged!

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Originally Posted by anandpadhye View Post
What does this actually mean?
HMFC is a Mitsubishi owned company?
If not, how will Mitsu breath free?


And what a dispassionate name this - "Hindustan Motors Financial Conrportation" - for the unit that makes EVO-X and the likes
The portion of HM-Mitsu JV which was owned by HM has now been transferred to HMFC. This way (loss making) HM has been decoupled from (profit making - not sure) Mitsubishi. HM will now focus on its own portfolio of Ambassador and Winner only. Most probably this may be a way to shut down HM in future without affecting Mitsubishi India operations.

HMFC will be some sort of holding company for the JV, just like Aston Martin is owned by Kuwaitian and Italian private equity funds InvestmentDAR and Investindustrial respectively among others.
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Old 11th January 2013, 13:33   #4
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Default Re: Hindustan Motors restructures; Mitsubishi-making Tiruvallur unit Demerged!

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Originally Posted by sarthakgupta View Post
This way (loss making) HM
Loss making HM? They would have got return on their investments few decades ago, and they still sell around 500 units per month, year after year, for not so cheap prices!

I dont think this would is going to benefit Mitsu, unless it is completely independant from HM!
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Old 11th January 2013, 14:52   #5
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Default Re: Hindustan Motors restructures; Mitsubishi-making Tiruvallur unit Demerged!

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Originally Posted by CrAzY dRiVeR View Post
Loss making HM? They would have got return on their investments few decades ago, and they still sell around 500 units per month, year after year, for not so cheap prices!

I dont think this would is going to benefit Mitsu, unless it is completely independant from HM!
Please see the following report clip:
Quote:
Hindustan Motors Limited (HML) has been consistently posting losses since FY09, except in FY11 where the net profit stood at Rs.0.75 crore. In the last 10 quarters, the company has managed to profit all of four times. HML announced their results for Q1 FY13 on 13 August 2012 wherein the company reported a decline in net income from operations of 12.76 per cent, from Rs.119.86 crore in Q1 FY12 to Rs.104.56 crore in Q1 FY13. The company also posted a loss of Rs.35.49 crore in Q1 FY13 as compared to the profit of Rs.17.2 crore in Q1 FY12.
This little profit that we see is mainly due to asset sales carried out by HM. For e.g. in FY11 they sold some of their land to GM.

Source:http://www.dsij.in/ArticleDetails/ta...an-Motors.aspx and http://www.moneycontrol.com/news/res...re_776409.html
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