On Monday, shares of Hero Motocorp fell over 5 percent to an intraday low of Rs 1,569 on BSE, the lowest since June 2013, after the two-wheeler maker told Economic Times that it will revoke force majeure to suspend full payments to vendors as sales come to a standstill due to the COVID-19 lockdown.
On Friday, the company in a stock exchange filing informed of the extension of its halt in operation to 14 April. It said that "in view of the various directives issued by the Central Government /concerned State Governments relating to lockdown and the need for social distancing, the operations at our plants in India will continue to remain suspended beyond March 31, 2020 until April 14, 2020."
According to the ET report, Hero Motocorp told its sppliers that BS-4 and BS-6 vehicles remained unsold at dealerships. "In this situation, we are left with no other option but to invoke force majeure and regret to inform that HMCL will not be in a position to meet all its obligations," the report quoted the company's letter to its suppliers.
The country's largest two-wheeler maker on Monday issued a statement saying that it is "prioritising payments process to make full and on-time payments to a large number of MSME and small vendors, despite challenges arising out of the complete lockdown in the country which has made processing transactions at a normal pace difficult."
"In fact, we have paid all our contractual workers well in advance for the full month as they have been the ones impacted most adversely," it added.
The stock has fallen 14 percent in value after it announced its halt in operations on 22 March.