The Chinese arm of French insurance player AXA has evinced interest in buying a 51% stake in heavy commercial vehicles manufacturer AMW Motors, three senior bankers told FE, adding that they are in advanced stages of discussion with the company to offload their stake in AMW. In FY15, AMW Motors reported a net loss of Rs 79 crore on the back of Rs 590 crore in revenues. Its total debt stood at Rs 1,535 crore in FY15, up 7% from the same period in the previous fiscal.
According to one public sector banker, officials from the Hong Kong branch of AXA have recently met the consortium of lenders to discuss the proposal. However, bankers are baffled why an insurance company was interested in an heavy-duty truck manufacturer. “It’s a million dollar question but we are ready to sell if the due diligence process is followed,” another banker said.
While the SDR scheme was aimed at allowing banks change management in severely stressed companies, only a handful of buyers have shown interest in the assets. AMW Motors is likely the only company in which SDR, including sale of the asset, could be a reality.
Also called AXA Tianping Property & Casualty Insurance Company Limited, (AXATP), according to its website, is the largest foreign-capital property and casualty insurance company in China market. It was established by merger and acquisition between Tian Ping Auto Insurance Company Limited, the first auto-insurance-specialized company in China, and the wholly-owned subsidiary of the largest global insurance group AXA in China.