Hero Moto falls 5% as co halts payments to vendors

Shares of Hero Motocorp fell over 5 per cent in early Monday trade after the company invoked force majeure to suspend full payments to vendors, since it has “no visibility of receivables,” with sales having come to a standstill because of the Covid-19 lockdown.

As per a report in ET, Hero MotoCorp told vendors that BS-4 and BS-6 vehicles remained unsold at dealerships, which will remain shut at least until mid-April, when the three-week lockdown is scheduled to end.

“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 company told its suppliers in a letter.


The decision by Hero follows the Supreme Court refusing to grant an extension of the March 31 deadline by which sales of BS-4 vehicles have to stop, despite the lockdown. It, however, allowed 10 per cent of remaining BS-4 stock to be sold in 10 days after the lockdown gets over, except in Delhi-NCR, in its ruling on Friday.

Hero is said to have the largest share of the total stock of 700,000 unsold BS-4 scooters and motorcycles in the country.

At 9.45 am, shares of the company were down 2.60 per cent to Rs 1,617. It hit a low of Rs 1,569 during the trade.