MLR Motors gets time till March for financial closure

Hyderabad-based MLR Motors, which failed to achieve financial closure for its Rs 1,250-crore project, got a fresh lease of life with the Andhra Pradesh government agreeing to extend the deadline till March 31, 2010.

MLR Motors in October approached the state government for further extension of deadline for achieving financial closure stating the automobile engineering industries experienced recession over the past one year. The investors and lenders in India were not taking exposure in the automobile sector due to the economic meltdown, it told the government.

“They (MLR Motors) have not paid the land cost for 225 acre that was allotted to them,” a senior official told Business Standard.

MLR was given 225 acre at Toopran mandal in Medak district close to Hyderabad

The foundation stone for the project was laid in April 2007 and the company was to achieve financial closure within one year. However, it was given an extension till October 2008 and later till October 2009 in view of the global financial crisis.

MLR Motors was scheduled to produce about 60,000 cars per year in Phase-I. The company planned to roll out two compact diesel car variants (900 cc and 1,500 cc) by mid-2009.

Former Hyundai India head BVR Subbu, who was a key stakeholder in the project, backed out of the project.

The company has commissioned IFCI Limited to syndicate the loans for the car project.