With a clutch of lenders reportedly not having finalised a line of credit to Amtek Auto, the auto components player is understood to have delayed repayments to its bondholders, bankers and bondholders told FE.
“We have not received any funds from Amtek Auto,” one of the bondholders said at the time of going to press. A sum of Rs 800 crore was due to bondholders on Monday. Several attempts to contact senior executives of Amtek Auto met with no response.
Lenders said although a loan of Rs 800 crore was under consideration, it had not been sanctioned. A public sector bank executive, part of the joint lenders’ forum (JLF) that held a meeting on Monday, told FE most member banks had not sent in letters to approve the additional funding. “The company has not sought a restructuring of the debt. It has asked for additional funds to overcome cash flow problems,” the executive noted, adding that lenders were working on it.
Investors in the company include Axis Bank, Syndicate Bank and Corporation Bank, while IDBI Bank and Bank of Maharashtra have term loan exposures. Bankers said that although the corrective action plan (CAP) for term loans is yet to be finalised, chances of the company being able to access fresh credit are high. “Of the total Rs 800 crore due for redemption on September 20, around Rs 15 crore is to retail investors. The company is ready to pay retail investors but has sought fresh loans to repay institutional investors,” said a lender.
In March 2015, the company’s standalone gross debt stood at Rs 7,844 crore, up from Rs 7,036 crore last year. In the three months to June 2015, it reported a net loss of Rs 158 crore on the back of Rs 866 crore in revenues with the interest outgo at Rs 237 crore.
Amtek Auto, part of the Amtek Group, is headquartered in New Delhi and is an integrated automotive component manufacturers in India. The company has facilities in India, Europe and North America and manufactures components for auto as well as non-auto sectors such as the railways, speciality vehicles, aerospace, agricultural and heavy earth moving equipment.
Share of Amtek Auto rose as much as 14.5% in intra-day trade on Monday but the scrip closed 7.2% higher at Rs 51.90 on the BSE.
The company’s managing director John Flintham had recently told a business news channel the company may look to sell stakes in overseas business to pare debt. “We have a debt-reduction programme,” Flintham told the channel.
“We will sell minority stake in overseas businesses, which are profitable and owned 100% by Amtek Auto.” Sales of non-core assets may fetch about $500-600 million, he said.
The company’s overseas businesses earn $1.8 billion in revenue and their equity value is about $2 billion, Flintham had told the channel, adding that it is planning to sell between 25% and 40% to raise as much as $600 million.
Amtek Auto’s troubles began when CARE Ratings suspended its credit rating last month. JPMorgan India Treasury Fund and JPMorgan India Short Term Income Fund have an exposure of around Rs 130 crore to the company. Due to the downgrade by rating agencies there was a sudden rush by investors to redeem their units and the fund house on August 28 had capped redemptions at 1% of the total outstanding units on both schemes.
However, on September 14 JPMorgan Asset Management Company had announced it would seek the approval of unit holders of both schemes to segregate the illiquid assets from the schemes within seven working days.
