Coronavirus lockdown | Hero MotoCorp suspends full payments to suppliers: Report
Hero MotoCorp reportedly has the highest share of the total 700,000 unsold BS-IV scooters and motorcycles in India.
Mar 30, 2020 / 10:31 AM IST
Amid the coronavirus lockdown, Hero MotoCorp has suspended full payments to suppliers since sales have paused and there is “no visibility of receivables,” according to a report by The Economic Times.
The two-wheeler manufacturer's dealerships will be closed till April 14 due to a 21-day nationwide lockdown to contain the spread of COVID-19. Hero MotoCorp told suppliers that several BS-IV AND BS-VI vehicles were unsold at the dealerships, the report said.
"In this situation, we are left with no other option but to invoke force majeure and regret to inform that HMCL will not be in a position to meet all its obligations,” the company said in a letter to its suppliers, as viewed by the publication.
Hero MotoCorp has the highest share of the total 700,000 unsold BS-IV scooters and motorcycles in India, the report said.
Moneycontrol could not independently verify the story.
“Despite the challenging circumstances... we are prioritising payments process to make full and on-time payments to large number of MSMEs and small vendors,” the company said in an email to The Economic Times.
"Our other vendors are also receiving payments, albeit in a phased manner on account of the current situation. In fact, we have paid all our contractual workers well in advance for the full month, as they have been the ones impacted most adversely,” the company added.
Hero MotoCorp will release payments to micro, small and medium enterprises (MSMEs) and suppliers it owes up to Rs 2.5 crore as of March 23, the report said. The company also told vendors that it had stopped bill discounting facilities with immediate effect.