HMT jumps after board OKs hiking authorised share capital

The announcement was made after market hours on Tuesday, 4 June 2013.

Meanwhile, the S&P BSE Sensex was up 12.36 points, or 0.06%, to 19,558.14.

On BSE, 1.65 lakh shares were traded in the counter as against an average daily volume of 67,436 shares in the past one quarter.

The stock hit a high of Rs 31.45 and a low of Rs 30.30 so far during the day. The stock had hit a 52-week high of Rs 50.15 on 18 October 2012. The stock had hit a 52-week low of Rs 24.50 on 28 March 2013.

The stock had underperformed the market over the past one month till 4 June 2013, sliding 13.31% compared with the Sensex's 0.15% fall. The scrip had also underperformed the market in past one quarter, falling 13.31% as against Sensex's 3.54% rise.

The small-cap company has an equity capital of Rs 760.35 crore. Face value per share is Rs 10.

HMT said that the government has approved revival and restructuring of the company based on recommendations of the Board of Reconstruction of Public Sector Enterprises (BRPSE). The approved revival plan envisages financial support from government against issue of 8% redeemable preference share capital of the aggregate face value of Rs 425 crore and conversion of Government of India loans into equity share capital to the extent of Rs 443.74 crore. This will entail increase in the authorised share capital of the company from the existing Rs 1450 crore to Rs 2100 crore by creation of new preference and equity share capital.

Accordingly, the board of HMT at the meeting held on 29 May 2013 approved increasing authorised share capital of the company from Rs 1450 crore to Rs 2100 crore, subject to approval of the Government and shareholders of the company.

HMT said it will increase the authorised share capital of the company to Rs 2100 crore by creating an additional 23 crore equity shares of face value Rs 10 each and 4.20 crore preference shares of face value Rs 100 each.

Further, the board also approved allotment of fully paid redeemable cumulative 3.5% preference share capital of the face value of Rs 443 crore in favour of President of India, as per the terms of sanction of the investment by Government.

HMT will hold an extraordinary general meeting (EGM) of its shareholders on 21 June 2013.

HMT reported a net loss of to Rs 28.89 crore in Q3 December 2012 as against net loss of Rs 30.98 crore in Q3 December 2011. Net sales surged 172.48% to Rs 49.21 crore in Q3 December 2012 over Q3 December 2011.

HMT was incorporated in 1953 by the Government of India as a machine tool manufacturing company. Over the years, the company diversified into watches, tractors, printing machinery, metal forming presses, die casting & plastic processing machinery, CNC systems and bearings.

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