Hindustan Motors will also merge the power products division at Hosur and the power unit plant at Indore and spin them off into a separate company.
It is also planning to sell its excess land in Uttarpara in West Bengal and use the money to fund a voluntary retirement scheme and pare interest costs.
The company is in discussions with the West Bengal government to sell this land for over Rs 100 crore (Rs 1 billion). Hindustan Motors posted a net loss of Rs 80.95 crore (Rs 809 million) in 2003-2004, against Rs 26.74 crore (Rs 267 million) in the previous year.
"The company has informed us that they are in an advanced stage of discussion for roping in a financial investor. The plans to merge the divisions at Indore and Hosur and spin them off into a separate company are long-term,"
Responding to a Business Standard questionnaire, the Hindustan Motors spokesperson said: "The company has several initiatives on hand. These include discussions with lenders for possible interest rate reduction, making the idle assets work, and looking at strategic alliance for growth opportunities in specific areas."
At present, Hindustan Motors manufactures Mitsubishi vehicles, Lancer and Pajero, under licence. Mitsubishi had earlier initiated talks for setting up a joint venture for the Lancer.
However, the talks made no significant progress as the Japanese company was reeling under huge losses and faced a host of problems in its home country.
The new management that has taken over at Mitsubishi is expected to take a decision on the issue.
The company has facilities at Uttarpara (where the Ambassador is rolled out), Chennai (Lancer and Pajero), Hosur (power products division) and Indore (power unit plant).
