Sources have told CNBC-TV18 that the deal will help reduce New Delhi-headquartered component manufacturer‘s debt by Rs 6,000 crore-Rs 7,000 crore.
Amtek Auto is "very close" to completing an asset monetisation deal that will significantly reduce the New Delhi-headquartered component manufacturer’s debt, sources have told CNBC-TV18.
The company is likely to raise USD 1 billion via asset monetisation. Neumayer Tekfor, which Amtek acquired in 2013, is set to contribute the largest portion of the asset monetisation plan. The exercise is likely to reduce the company’s debt by Rs 6,000 crore to Rs 7,000 crore.
The deal is expected to be completed by March, the sources told CNBC-TV18. The company's stock up was 11 percent after the news broke, with an intra-day high of 15 percent.
Desperate to get rid of the huge debt of more than Rs 13,000 crore, Delhi-based Amtek has been trying to sell its German division Tekfor since October 2015 without much success.
As many as seven bids were received by Amtek by October last year but the asking price, which is believed to be in the range of USD 800 million-USD 1 billion has disappointed the bidders. Britain's decision to exit from the Europe Union also hit the sale process.
Mahindra & Mahindra’s Spanish partner CIE was believed to be a prospective buyer. However, M&M is not in favour of participating in an ‘auction-like’ sale process.
A Chinese company and a private equity company were also believed to have expressed interest in the sale.
Germany-based Amtek Tekfor Holding GmbH makes parts for transmissions, engines and drivelines. The company has five plants in Europe, two in South America, two in Asia and one in North America. Its clients include Volkswagen Group, Fiat, BMW, Daimler, to name a few.
Unlock 75% more savings this festive season. Get Moneycontrol Pro for a year for Rs 289 only.
Coupon code: DIWALI. Offer valid till 10th November, 2019 .