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05. March 2018

IN - Creditors may offer to sell Amtek Auto along with subsidiaries

IN - Creditors may offer to sell Amtek Auto along with subsidiaries

Potential suitors have written to Amtek Auto creditors asking to include group firms such as Castex Technologies and Metalyst Forgings in the sale

Creditors of Amtek Auto Ltd, the auto parts maker undergoing insolvency proceedings, are considering a proposal to sell the company along with its units, following a lukewarm response to the first round of bidding when it was offered as a stand-alone asset, two people aware of the development said.

Potential suitors, including a large global special situations fund, have written to the creditors asking to include various group companies such as Castex Technologies Ltd and Metalyst Forgings as a single offering, the people cited above said.

Some of Amtek Auto’s units including Castex features in the second list of 28 stressed accounts issued by the Reserve Bank of India for resolution and are undergoing separate bankruptcy proceedings.

At the end of March 2017, Castex had a total debt of Rs6,285 crore whereas the two other units of Amtek—Metalyst Forgings Ltd and Amtek Ring Gears Ltd had debts of Rs3,473 crore and Rs2,000 crore, respectively.

While Amtek Auto was admitted to the National Company Law Tribunal (NCLT) in July last year, Castex and Metalyst were admitted in December. Corporation Bank initiated insolvency proceedings against Amtek Auto in the Chandigarh bench of National Company Law Tribunal in July 2017. Under IBC, a distressed account needs to be resolved within a timeline not exceeding 270 days. Amtek’s lenders have already sought a 90-day extension as the 180-day deadline lapsed on 20 January.

Mint had reported on 4 February this year that UK-based Liberty House Group, which was one of the two bidders of Amtek Auto, was considering a revised bid for the troubled auto component maker after its previous bid was rejected by a panel of lenders. Lenders had previously rejected two bids received from Liberty House and Deccan Value Investors, a US-based hedge fund on the grounds that they bid less than Amtek’s liquidation value. Dinkar Venkatasubramanian, a partner at consulting firm EY, was appointed as interim resolution professional for all the three companies. An email requesting comment sent to him remained unanswered till press time.

Amtek Auto has presence in forging, grey and ductile iron casting, gravity and high-pressure aluminum die casting and machining and sub-assembly. The company also manufactures components for non-auto sectors such as the railways, specialty vehicles, aerospace, agricultural and heavy earth moving equipment.

Castex’s product portfolio consists of a range of components for two and three wheelers, cars, tractors, light commercial vehicles (LCV), heavy commercial vehicles (HCV) and stationary engines, while Metalyst is the second-largest maker of forged automotive components, cold forged parts and high tensile fasteners in India. Its product portfolio consists of a range of components for 2/3 wheelers, cars, tractors, LCVs and HCVs.

“Several potential suitors who had submitted an initial express of interest in Amtek Auto feel that buying the company without the key subsidiaries will not be a prudent decision,” said one of the two people cited above. “Only if the entire production and supply chain is available will it make business sense.”

Mint had reported in October that Bharat Forge, Liberty House, Blackstone India, TPG Asia, Bain Capital, Farallon Capital Management LLC were among investors who had submitted expressions of interest to acquire Amtek.

Source: www.livemint.com

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