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Amtek ropes in Morgan Stanley to sell minority stake in foreign arms

The consolidated debt of the group is about Rs 17,500 crore. Its immediate aim is to bring this down to about Rs 10,000 crore.

, ET Bureau|
Updated: Oct 16, 2015, 12.15 PM IST
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The consolidated debt of the group is about Rs 17,500 crore. Its immediate aim is to bring this down to about Rs 10,000 crore.
The consolidated debt of the group is about Rs 17,500 crore. Its immediate aim is to bring this down to about Rs 10,000 crore.
NEW DELHI: Amtek Auto has hired Morgan Stanley to find buyers for a minority stake in its overseas units, chairman Arvind Dham said, as the auto parts maker tries to wriggle out of its cash problems, compounded by a bond default.

The company is looking to sell up to a 30 per cent stake in some of the foreign units, Dham said on Thursday. "Any other talk of our group selling overseas assets (completely) is factually wrong. You have heard it from the horse's mouth," he told ET. The overseas assets are held by subsidiary Amtek Global Technologies. The banker's mandate is to find a private equity or strategic investor.

Amtek Auto brought itself under a debt mountain after making a string of big-ticket acquisitions. The consolidated debt of the group is about Rs 17,500 crore. Its immediate aim is to bring this down to about Rs 10,000 crore.

It defaulted on Rs 800 crore of bonds that matured on September 20. The company is reportedly seeking a Rs 1,000 crore loan to repay bondholders. It has 90 days from the day of default to repay before the debt is considered as a non-performing asset.

Following the debacle, both foreign and domestic institutional investors stampeded out of the stock. While institutional investors' holding fell to 20.92 per cent as of September 30 from 35.3 per cent three months earlier, its market value fell 72 per cent in the September quarter.

On Thursday, the shares closed 0.3 per cent lower at Rs 43.70 on the BSE. The group hopes to raise about $1 billion (Rs 6,482 crore) in the next six months. Half the amount will come from the sale of stake in Amtek Global Technologies, while the remainder will accrue from non core assets. In an interview with ET last month, Dham said that although its Indian business was under stress, the overseas business was doing well.

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