Amtek Auto posts Rs 529-crore loss in January-March qtarter
MUMBAI: Debt laden Amtek Auto BSE 7.59 % on Tuesday reported a loss of Rs 529 crore for the January-March quarter, but its chief executive sounded confident about the future with the group's long overdue restructuring finally getting underway.
Amtek has shortlisted two bidders for Tekfor, its German subsidiary , John Flintham told ET in an interview. The company is also in talks with a financial investor to offload a
significant stake in Amtek Auto, he added, but declined to elaborate.
People in the know said the stake sale could be for 25-35%. This stake sale will be in addition to selling of non-core assets in India and the Tekfor transaction. These are expected to help the group retire debt by two-thirds, or Rs 10,000 crore, in the coming three to six months. According to company executive, Amtek had consolidated debt of Rs 14,800 crore at the end of March 31, 2016. The endeavour is to shed debt ..by two-thirds, or Rs 10,000 crore, in the coming three to six months. According to company executive, Amtek had consolidated debt of Rs 14,800 crore at the end of March 31, 2016. The endeavour is to shed debt and break into profits within a year.
"We are in talks with several marquee investors, which we hope will fructify in the coming three months. We have been doing quite a lot of due diligence on technical and financial viability and we are now moving towards final discussion with our investors to look to sell of significant chunk so that we can reduce the debt further," said Flintham.
After the induction of a new investor, the company is likely to restructure its operations and merge some of the units back into Amtek Auto. These units had earlier been hived off and listed separately, earning investors ire. On being asked for a time frame to complete the transactions, Flintham said he will be disappointed if the entire sale process and restructuring are not consummated by the third quarter of this fiscal year.
Updating on an asset monetisation and debt realignment plan announced earlier, Flintham said the company is in the "final prongs" of agreeing with one of those two bidders for Tekfor, which is very much in line with the time frame shared with the board. However, on the sale of non-core assets in India, Flintham said: "The process is slower," which is a reflection of the economy in India.
The operational performance of the company has improved, but it still continues to bleed. While .Amtek registered a loss of Rs 529 crore, the company said most of that was contributed by an exceptional item of Rs 439 crore. Flintham didn't elaborate on the exceptional item. The company said capacity utilisation had gone up to 55% for the group in the past quarter and the overseas business had offered a good support with almost 75% of its quarterly revenue coming from foreign markets.