Hind Motors to rope in investor to revive Ambassador car

Hindustan Motors Ltd, the country’s oldest car company, is going for a name change that would come with a possible induction of a financial investor to help relaunch and revive its iconic Ambassador car.

The C K Birla group would be renaming the company, set up in 1942 in Gujarat, as Hindustan Motors Bengal Ltd after its Chennai plant, that churns out Mitsubishi vehicles, is demerged into an existing subsidiary, Hindustan Motor Finance Corp (HMFC), the process for which has already started in January.

HMFC would also be renamed with the coming in of a foreign car maker as a “strategic partner” and would get listed, Uttam Bose, managing director and CEO, Hindustan Motors, said.

“There are definitely financial investors and strategic partners who are showing lot of interest in our businesses and there is a possibility that you would hear from us soon. Hindustan Motors Bengal would be the new name for the company that would manage the Ambassador plant in Uttarpara and also the Pitampura plant. Chennai plant is being transferred to existing subsidiary, HMFC, which will be listed and renamed,” Bose said on the sidelines of the launch of BS-IV compliant Ambassador Encore model.

“We have two very distinct business, one is our Chennai plant where we have a manufacturing contract with Mitsubishi and now with Isuzu, the other being our Ambassador plant in West Bengal where we are developing the new Ambassador small car of under 4 metre length. So the financial investors or the strategic partners who are showing interests are not looking at the whole gamut.

Investors or partner who will come would be very specific to either businesses,” Bose said, clarifying that HM is talking to foreign car makers other than its existing partners like Mitsubishi and Isuzu for a stake sale in HMFC.

“It would be a third party,” Bose said, adding that the valuation part and how much stake to be divested would be decided later.

The West Bengal government and Bengal Shriram High Tech City Pvt Ltd, the real estate developer with whom HM developed a part of its Uttarpara land, have opposed the scheme of demerger of Chennai plant and have approached the court to stall the process though Bose doesn’t see any threat to the move and expects the process to get over by 2-3 years.

“The parties have no ground to oppose and the objections are irrelevant. The court’s hearing was in our favour. We have just received shareholders’ nod, with 99% voting in favour,” Bose said.