Hindustan Motors ties up with Shriram Properties Ltd for development of IT township & Auto Park

Hindustan Motors Ltd has announced that the Company has finalised an arrangement with M/s. Shriram Properties Ltd of Bangalore, for the development of 'An integrated IT Township and Auto Park' in 314 acres of Land specifically identified for this purpose and in accordance with the conditions laid down by the West Bengal Government in its approval order dated September 13, 2006.

The Company will forthwith submit necessary application to the consortium of lenders since the arrangement is subject to their approval.

Development of the proposed integrated IT Township & Auto Park would be accomplished jointly with M/s. Shriram Properties through a SPV. As consideration, the Company expects to receive about Rs 295 Crores in five tranches spread over the next ten quarters as well as non compete fee equal to 4% of sale proceeds.

The Company will be utilising proceeds form this arrangement for implementation of the revival and renewal of it's Uttarpara Plant, as committed in its application to the Government of West Bengal, namely investments on modernisation, expansion an development of contemporary automotive forging, stamping and foundry facilities and growth initiatives.

The Company had engaged M/s. HDFC Ltd for advising in the identification of prospective developers, evaluation of bids and to conclude the commercial terms.

Source : Equity Bulls

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