The Hindu Business Line : HM appoints HDFC as advisor for Bengal land sale

Sale of land
About 300 acres of the 740-acre land at the Uttarpara plant up for sale
Sale proceeds to be used for strengthening car and auto components business
To be also used for relieving a part of the company's Rs 110-cr debt

New Delhi , Aug. 17

CK Birla Group company Hindustan Motors on Thursday said it has appointed HDFC as advisors to sell a part of its land in West Bengal to private developers for which it has sought the State Government's permission.

"HDFC will be managing the process for us and we are looking to sell around 300 acres of the 740-acre land which we have at the Uttarpara plant," Hindustan Motors' Managing Director, Mr Ravi Santhanam, said on the sidelines of a press conference announcing the launch of the new SUV, Mitsubishi Montero.

He added that the company was awaiting a nod from the State Government before going ahead with the land sale, proceeds from which would be used for strengthening its car and auto components business.

The funds would principally be utilised for modernisation and expansion of the Uttarpara plant. It could also be used for relieving a part of the company's Rs 110-crore debt.

"The proceeds would be used for a vibrant manufacturing enterprise at Uttarpara and we hope that the final decision on the matter is taken soon," Mr Santhanam said.

According to the West Bengal Land Reforms Act, the Government could allow sale of land only by sick industrial units, the proceeds of which were to be used for the company's revival.

Hindustan Motors' auto components business, which includes automotive plastic, forgings and stampings, has grown over the past 18 months. "We expect the business to see considerable growth in the coming years. In fact, the business could account for 30-40 per cent of our total sales in the coming years. We have already got orders from domestic OEMs and are in the process of getting some foreign ones as well. We are also in the process of tying up funding to boost our auto components business," Mr Santhanam said.

Hindustan Motors' newly launched Montero has been priced at Rs 29.7 lakh.

The 3.2-litre Mitsubishi Montero has a four-cylinder turbo diesel engine that belts out 165 bhp. "With the Mitsubishi Montero, we are clearly in the niche market. We are not aiming at big volumes in the mass market," he said.

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