AMTEK AUTO
In 2015, Amtek Auto faced a cash flow mismatch for the first time in its history due to the global slowdown in the automotive industry. Problems worsened in the last fiscal when losses ballooned to `2,533 crore on revenues of just `1,999 crore.
Founder Arvind Dham, had a mercurial rise starting in the late 1980s as a supplier to Maruti Suzuki. Dham emerged as a supplier to global giants like Daimler-Chrysler and Renault Nissan. Over the last three decades, Dham expanded domestic capacity and made global acquisitions. Amtek has 19 plants across the US, UK, Mexico, Brazil, Germany, Italy and Hungary. It had almost doubled capacity in the crankshaft, flywheel and gear assembly anticipating strong demand from local car manufacturers. But utilisation languished below half. A slew of overseas acquisitions and domestic capacity addition leveraged the balance sheet and increased interest outgo.
The Chandigarh bench of NCLT is hearing the application of lead bank Corporation Bank. In Amtek Auto, banks are in agreement to bring new investors and sell international assets and non- core assets. The company has made efforts to sell German Amtek Tekfor, which it bought five years ago for some `6,000 crore. Overseas subsidiaries like Amtek Integration are making profits. “They also own some bad assets where no value is expected,” says a banker. Banks say lenders have to bring operating companies into the bankruptcy code. Currently, Amtek has a dozen subsidiaries which in turn have another 42 subsidiaries. In addition, there are half a dozen joint ventures and associates. Bankers believe that strategic investors could be the way out to resolve the assets.
“If not handled properly, the company may go into liquidation,” says a consultant. Amtek has also borrowed at the subsidiary level, which could complicate matters. Private equity player KKR has launched bankruptcy proceedings against overseas arm Amtek Global Technologies, which owes the PE firm close to $450 million in debt. The promoter is willing (and even mulling selling some personal assets), but multiple subsidiaries and financial creditors could complicate matters. Amtek did not respond to questions raised by BT on the way forward.