The company's shareholders have given a nod for the de-merger of its Chennai unit and the revenue from the de-merger is likely to be Rs 300 crore, says Uttam Bose, managing director and chief executive officer, Hindustan Motors.
Uttam Bose, managing director and chief executive officer, Hindustan Motors is expecting a revenue of Rs 300 crore after de-merging from its Chennai unit.
Speaking to CNBC-TV18, Bose says that profit, however, cannot be estimated right now due to a fluctuating foreign exchange.
Also read: Tata Motors unit to stop production at Spanish plant
The company had in January 2013 decided to de-merge and transfer its Chennai car plant to Hindustan Motor Finance Corporation Limited (HMFCL)- its fully owned subsidiary organisation. The shareholders have also given a nod for the de-merger.
Below is the edited transcript of Bose's interview to CNBC-TV18.
Q: We understand that the shareholders have given a nod for the de-merger. Now your Chennai plant will be carved out of the company. So particularly for this Chennai plant could you tell us what the revenues and profits will look like?
A: Profit cannot be stated now. It depends on the forex rate and it is just killing us at this point of time. Hence, revenues will be troubled than what we are having today.
Q: Can you give us a number and in terms of profits will you be profitable or will it be a loss?
A: I cannot tell this to you now because of the fluctuating forex rate. But yes, revenues would be around Rs 300 crore.
Q: What about the land issues, has that been sorted out? I believe there was some land issue in West Bengal, just wanted an update on that?
A: Well it is an ongoing process, we are in talks with the West Bengal government and it would be resolved soon.
Q: Do you need the approval of the West Bengal government for the demerger to take effect?
A: No. For the de-merger we don't need any approval from the West Bengal government but as they have raised some objections in the High Court, I think it would depend upon the hearing. However, the HC has already given us a go-ahead and we have already taken the shareholders view. So, we are going ahead with the demerger.