Govt nod for revival of HMT

The plan will envisage financial support, waiver from govt of India

Bangalore-based HMT Ltd, manufacturer of machine tools and watches on Thursday, informed BSE that the government has approved revival and financial restructuring plan for the company as recommended by the Board for Reconstruction of Public Sector Enterprises (BRPSE), which envisages financial support, waivers from the government of India.

According to a company filing on the BSE, it said, the features of the approved revival plans amounting to Rs 1083.48 crore, will be implemented in a phased manner. The package is aimed at financial restructuring, upgrading technology, upgrading of plant and machinery and modernisation.

“There would be a cash infusion of Rs 447.92 crore in the form of issue of 8 per cent redeemable preference share capital of the face value of Rs 425 crore for plant modernization and capacity augmentation, technology upgradation, working capital, repayment of certain liabilities and a Bridge Loan of Rs  22.92 crore from the government at 7 per cent interest per annum, over a period of 2 years,” the company said.

HMT Ltd, PSU company under the Department of Heavy Industries also said, a non cash assistance in the form of conversion of government of India loans into equity to the extent of Rs 429.92 crore and waiver of accumulated interest of Rs 205.64 crore also was approved by the government.

The Government has also approved implementation of revised pay scalesôwages and revision in the retirement age of employees from 58 years to 60 years from the date of approval of the plan by the government.

The PSU also said the government has given permission to sell identified surplus land for redemption of the preference share capital and repayment of bridge loan. According to an official, the public sector unit (PSU) would garner about Rs 400 crore from sale of its surplus land.

‘Formal financial sanctions for cash infusion and non cash assistances etc is expected shortly from the government,” the filing added.