NEW DELHI: Delhi-based component major Amtek Group is going in for a major restructuring exercise as part of which it will consolidate all its Indian companies under group flagship Amtek Auto.
The companies to be consolidated will include Amtek India, Ahmednagar Forgings, Benda Amtek and Amtek Siccardi.
Domestic restructuring is only one part of the total package. Amtek is also consolidating its global operations under its Netherlands-based holding company.
This company will be 100% owned by Amtek Auto, sources said. Amtek’s overseas operations-which include GWK Amtek, Triplex Ketlon, JL French Castings’ Whitham plant, Zelter and Smith & Jones — will be consolidated under the Netherlands-based holding company making it a $700 million entity. Sources say E&Y is acting as the advisor to for the restructuring.
According to industry sources, the management is looking to acquire scale through this consolidation exercise. “Apart from unlocking shareholder value, it will also merge the various entities into a single company with a turnover of around Rs 2,500 crore giving it critical mass,” said a senior consultant source. “That would improve synergies, offer better scope for cost-cutting due to sourcing scale and allow the management to leverage a stronger balance sheet,” he added.
As for the overseas consolidation, the purpose is mostly tax benefits because Netherlands is a tax haven, sources said. Amtek has been very aggressive on the M&A front lately. It’s latest is a Rs 1,700 crore bid for the Frankfurt-based KSM Castings.
Recently, it bought UK-based gear company Triplex Ketlon. The group’s first acquisition was US-based ring gears manufacturer Midwest Manufacturing in 2002, followed by UK-based GWK and Lloyds Brierly Hill. It’s other acquisitions include Sigmacast Iron and the aluminium casting facility of Germany-based Zelter.
Amtek Auto is stepping on the gas in terms of acquisitions at home as well. The company has completed two local acquisitions — Akiel Castings in Pune and Amforge’s conrod division in Delhi — and is also tying up tech collaborations and JVs with global casting companies.