Thursday, 22 December 2011

Amtek Auto scouts for cheap assets in India, Europe

India's second Largest forging maker, Amtek Auto is scouting for acquisition of assets and take the advantage of the prevailing Global slow down in the Auto Component space, said Mr. Santosh Singhi, Chief Financial Officer at Amtek Auto.

The Amtek group has cash reserves of close to 15 billion rupees, which Singhi said could be used as the basis to acquire forging, machining and casting businesses.

Amtek, which ranks second behind Bharat Forge in production of forgings, is a major supplier to local and global automakers, including Maruti, Tata Motors Hero Motor Corp, General Motors , Ford and BMW

Singhi said subsidiary Amtek India plans to raise funds via foreign currency convertible bonds (FCCBs) as this was a good time for overseas dollar borrowing.

Earlier this month, Amtek India's board approved fundraising of up to $250 million through loans, external commercial borrowings and debentures.Singhi said the exact amount for the FCCB issue would be decided in the next few days."

We are talking to various investment bankers," Singhi said.The next six to nine months would be an appropriate time to borrow in dollars as the currency looks set to peak (against the rupee) after that, he said."

There are a lot of FCCBs due for redemption so a lot of dollar buying will happen," he said. More than two dozen companies on the BSE-500 index face FCCB redemptions worth 330 billion rupees by the end of the next fiscal year in March 2013, according to research by Indian brokerage Edelweiss Capital."I feel it's a good time to borrow in dollar as the dollar will come down after September," Singhi said. Anyone who buys dollars now will ultimately gain, he said.

At 1:39 p.m . (0809 GMT), shares in Amtek Auto, valued about $415 million, were down 0.05 percent at 93.85 rupees in a firm Mumbai market.


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