Mahindra interested in Amtek's overseas assets

Mahindra CIE Automotive, the Indo-Spanish diversified auto component maker, is amongst the handful of companies who have shown interest in buying business assets of cash-strapped auto parts maker Amtek Auto.

Investment bankers who have been given the mandate for the sale, have made presentations to top management of Mahindra CIE, an industry source said.

Amtek Auto is liquidating its overseas assets to bring down its debt of Rs 15,000 crore. For this Amtek has been talking to companies in India and others global entities since the past several months. However, the deal has been repeatedly stuck over valuations.

Mahindra CIE, which recently bought Bengaluru-based Bill Forge for Rs 1,331 crore, has not yet got into a serious dialogue with the Amtek Auto promoters.

Amtek is talking to several companies and is thus creating an auction like environment. But we would like to speak to them and have a constructive dialogue", a Mahindra CIE source said.

The units up for grabs belongs to the Germany-based Amtek Tekfor Holding GmbH which 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.

When contacted Hemant Luthra, chairman of Mahindra CIE declined to comment while a detailed questionnaire sent to Amtek Auto remained unanswered at the time of going to press.

What has impacted sale of Amtek Tekfor Holding is the successful buyout of Hay Group to Japan's Musashi Seimitsu by the Gores Group. The Hay Group was Amtek Tekfor's main rival and was sold for about $563 million, a price believed to be less than the asking price quoted by Amtek, which is around $800 million to $1 billion.

"Because of the Hay's deal Amtek cannot sell at the same price it has been seeking earlier. The company will have to lower its valuations", an industry source said.