MatexNet to auction Standard Motors plant and machinery

Chennai: It is going to be the biggest e-auction of factory assets in India and could also rank as amongst the largest in the world. It is certainly for the first time that an Indian automobile manufacturer''s plant and machinery is to be auctioned off online at one shot.

Come 27 September, 2006, the Bangalore-based MatexNet Pvt Ltd will auction the plant and machinery of Standard Motors — the erstwhile automobile manufacturer based in Chennai — online through its B2B auction portal matexnet.com. The online auction is expected to see around 400 bidders including some from Sri Lanka and Burma.

Defunct since 1994, Standard Motors was recently acquired by Shriram Properties Limited in a court auction for Rs154 crore. The purchase includes 58 acres of land and machinery. As Shriram Properties plans to build a special economic zone for the information technology sector it has decided to dispose-off the machinery.

In order to realise better value and to avoid other problems associated with the traditional tendering process Shriram Properties has appointed MatexNet to dispose the machines. Says Jaganni Vasan, managing director, MatexNet, "There are over 1,000 machines in more than 60 sheds spread over 58 acres." For the auction the machines have been segregated into 48 lots based on their genre.

Adds S Yogeshwaran, director, "The plant and machinery is valued around Rs32 crore. Some of the machines are specific to the automobile industry and the balance could be used by other industries."

Speaking about the condition of the machines, he says, "Some are in good condition and could be used as they are. Some will have to be refurbished and there are few that are scrap."

What seems to be a simple auction is not really as simple, says Vasan. For one, the machines are spread over 58 acres. There are around 50 business units and more than 1,000 machines that have to be grouped. "The catalogue runs into 200 pages. Around 400 bidders will be there and they have to be trained. In addition the auctioning infrastructure has to be deployed as some of the bidders are overseas."

Though MatexNet has valued the machinery at Rs32 crore with help from industry experts, it has not fixed the reserve price. "The reserve price will be fixed on the auction day," says Yogeshwaran. He also says, "For successful bidders, we can also arrange finance to purchase the asset."

Meanwhile MatexNet plans to expand its operations. The company says that it will increase its headcount and expand its branch network to 43 from 15 at present. "We have opened an office in Singapore. Before this year end we will have offices in Colombo and Dubai," says Vasan.

The company is targetting on the non performing assets (NPA) of the banks. MatexNet will sell the assets directly or through Asset Reconstruction Company. The company has nine banks as its clients as of now.

The other area of focus will be automobiles. According to Vasan, most of the cars that ferry the business process outsourcing (BPO) employees will be now three years old. There are thousands of such cars. The fleet operators have to replace them soon. And we could get them better value for their fleet." A new portal will be launched soon for this.

Apart from auctioning, MatexNet is also into barter business. The company facilitates the exchange of goods and services between corporates for a fee. Over the past six months the company has done barter business for national brands like Akai, Tanishq, FoodWorld, Philips, Oyzterbay, Titan and others. The items bartered include consumer appliances, media space, jewelry, two wheelers and others.

Vasan expects the portals to handle around Rs2,500 crore in worth of transactions this fiscal, up from the Rs800 crore last year.