Indian car-making firm Hindustan Motors Ltd said recently it had signed a deal to sell its earthmoving equipment unit to Caterpillar Inc. of the United States for $72.1 million.
The sale will help the cash-strapped company reduce its crushing current long-term debt N.R. Kulkarni, financial adviser to the Chandra Kant Birla business group, to which the company belongs, said recently.
Hindustan Motors said its earthmoving division had a market share of around 50 percent in dumpers and 70 percent in loaders.
The division, set up in 1969, has made dumpers, loaders and track type tractors of its own design and under licence from Caterpillar since 1984 at its two manufacturing plants near Madras and Pondicherry in south India.
India has seen a surge in the demand for earthmoving machines which is expected to expand even further, owing to growing infrastructure needs, the statement added.
The division’s 1,400 employees will be transferred to Caterpillar, Kulkarni said.
Hindustan Motors reported losses of 603.7 million rupees on total revenues of 6.4 billion rupees in the six months to September 2000. Its losses in 1999/00 were 622.8
million on total revenues of 15.1 billion.
Hindustan Motors manufactures the Ambassador car at its plant in Calcutta in eastern India and Mitsubishi’s Lancer model at another plant in Madras. Its power products division
makes vehicle transmission systems in the Madhya Pradesh state.
It sold 13,222 cars in April-September 2000, up five percent from 12,588 cars in the same year ago period, which gave it a market share of 4.3 percent.
Caterpillar is a major manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines.
This story also appears on Truck and Trailer Guide.
