Hindustan Motors to Demerge its Chennai Car Plant

Unit to be transferred to fully owned subsidiary company HMFCL

Hindustan Motors Ltd (HML) has decided to demerge and transfer its Chennai Car Plant (CCP) as a going concern to its fully owned subsidiary organization Hindustan Motor Finance Corporation Ltd (HMFCL). The remaining business and interests of HML will continue to belong to and be managed by HML. 

The Scheme of Arrangement for this purpose was passed by the Board of Hindustan Motors Ltd at its meeting on January 10 at New Delhi. 

In consideration of the demerger, HMFCL will issue and allot to the shareholders of HML, one equity share of Rs. 5 each in HMFCL credited as fully paid up for every thirteen equity shares of Rs. 5 each fully paid-up held by them in the capital of HML. 

No fractional shares shall be issued by HMFCL in respect of the fractional entitlements, if any, to which the members of HML may be entitled on issue and allotment of Equity Shares in HMFCL as above. Such fractional entitlements shall be consolidated and allotted to officer(s) of HMFCL for sale in the market and the net sale proceeds shall be distributed to the members of HML in proportion to their fractional entitlements.

The scheme is subject to and conditional upon the requisite approvals being received therefor, including approval of shareholders and sanction of the Hon'ble High Court at Kolkata pursuant to Sections 391 and 394 of the Companies Act, 1956. Accordingly, the Scheme although operative from April 1, 2012, shall come into effect on the effective date, being the date or last of the dates on which certified copies of the orders sanctioning the scheme are filed by HML and HMFCL with the Registrar of Companies.

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