Amtrek Auto appoints Morgan Stanley to help pare debt

03 Nov 2015

Troubled auto component maker Amtek Auto Ltd on Monday appointed Morgan Stanley as advisors to assist in its debt reduction plan.

In a regulatory filing, the firm said it was considering various options, including a minority stake sale of up to 25-40 per cent in its overseas business.

Amtek Auto also said that it has "received a large number of enquires for the outright purchase of a couple of the company's overseas businesses which include for instance Tekfor group".

It further said the interest for this has come from trade players and financial players around the globe and claimed "these businesses are located in a much coveted market attracting premium valuations in the global markets".

"As mentioned there are several options and it is a matter of right value-opportunity that will determine the eventual decision," the company said without sharing details of valuations or amount of fund it looks to raise via sell-off.

In September, the company had stated that it was considering sale of non-core businesses, a minority stake in its overseas firm and some industrial real estate assets within the business to overcome financial crisis.

A month earlier, it had said there is "temporary cash flow mismatch" and to mitigate the situation, promoters have already infused Rs75 crore and if required in future will also infuse more funds.

It had attributed the reasons for its financial stress to the current market scenario "which caused decline in the sales and profit margins of the company".

The Amtek group is reported to owe over Rs26,000 crore to 32 banks, including State Bank of India, ICICI Bank, Axis Bank, Bank of Baroda, Bank of India, IDBI Bank, Bank of Maharashtra and UCO Bank.

Besides the financial problems, Amtek Auto has also been facing investigation by the Securities & Exchange Board of India into alleged share price manipulation at its subsidiary Castex Technologies with the role of banks, mutual funds and rating agencies also coming under the scanner.

Sebi has started an investigation into possible rigging of Castex Technologies' share price through forcible conversion of foreign bonds.

Sebi had expanded the probe into the matter suspecting that more players could be involved in efforts to manipulate the share price of Castex Technologies.

Besides promoters of the company, Sebi was looking at the possible role of banks, mutual funds and rating agencies in the whole issue.