HMT Machine Tools receives financial aid from Govt

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HMT Machine Tools receives financial aid from Govt
The Cabinet Committee on Economic Affairs (CCEA) has approved financial assistance and other measures for HMT Machine Tools Limited. Accordingly, the company has been sanctioned an amount of Rs. 75 crore as non-plan loan for working capital purposes.

The CCEA has also allowed implementation of 1997 pay revision from the date of approval with one time relaxation of the Department of Public Enterprises (DPE) guidelines. The other benefits received to HMT Machine Tools are as under:

1) Provision of non-plan loan of Rs. 61.04 crore at seven percent interest per annum spread over two years [Rs. 29.34 crore for the first year (2014-15) and Rs.31.70 crore for the second year (2015-16)] towards additional impact of implementation of 1997 pay revision.

2) Empowering the Board of the company to increase the age of retirement from 58 to 60 years to the extent of 10 percent of the employees retiring in any year in relaxation of DPE guidelines. Guidelines, in this regard, would be formulated.

3) Extension of time for a period of 5 years would be required for the utilisation of the unspent balance available with the company under technology acquisition and upgradation fund sanctioned during the earlier revival plan and extension of time for a period of three years for utilisation of unspent balance, of Rs.2.63 crore for training and re-training.

4) Waiver of interest on Government of India loan for Rs.38.58 crore (calculated upto 31.3.2014).

The total financial implication of the proposal in the form of non-plan loan would be Rs. 136.04 crore. An increase in turnover will bring back business of the company towards a positive growth. Implementation of 1997 pay scale and increase in the retirement age would motivate the workforce. The company is expected to turnaround with the proposed infusion of funds at its head office in Bangalore and its manufacturing units located at Bangalore (Karnataka), Pinjore (Haryana), Kalamassery (Kerala), Hyderabad (Andhra Pradesh) and Ajmer (Rajasthan).

Story first published: Saturday, March 1, 2014, 10:35 [IST]
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