The Hindu Business Line : Divestment process to start ticking soon for HMT cos

TWO units of the state-owned HMT Group — HMT Tractor and HMT International — could be put on the divestment block in a couple of months, according to Government sources.

"Expressions of interest (EoI) to sell off both the units is likely to be invited once the new Government assumes charge after the general elections," sources said.

Incidentally, the sell-off process for the other four HMT subsidiaries (HMT Machine Tools Ltd, HMT Watches Ltd, HMT Chinar Watches Ltd and HMT Bearings Ltd) for which EoIs had been invited and received in 2002, would also be revived within the next few months, the sources said. HMT had planned to sell 74 per cent stake each, in HMT Machine Tools, HMT Watches, HMT Bearings and HMT Chinar Watches.

The Government had earlier invited EoIs from potential bidders for the subsidiaries. The sources pointed out that HMT Bearings had the highest number of interested parties with four EoIs while for the other companies, it was one each.

Meanwhile, HMT Ltd has recently signed a technology collaboration agreement with the UK-based Trantor Vehicles Ltd to manufacture and sell transport-oriented tractors. The company had also recently announced its entry into the multi-utility vehicle segment and unveiled a prototype equipped with a 1995 cc diesel engine.

This is being seen as a move to revive the unit before the divestment process begins. As per information available on the Bombay Stock Exchange (BSE), the Government holds more than 98 per cent stake in HMT Ltd (which is a listed entity). Interestingly, reports last year had suggested that the Government was also weighing the option of divesting a part of its shareholding to the public in order to get a better value for the shares.

The company has registered a total income of Rs 220.95 crore and a net loss of Rs 34.41 crore in 2002-03, down from a total income of Rs 317.41 crore and a net profit of Rs 10.24 crore in the previous year.

The HMT group is estimated to have a turnover of over Rs 500 crore, while the asset base is approximately Rs 800 crore.