Wednesday, January 17, 2007

Amtek Auto to re-bid for UK plant

Amtek Auto may renew its bid to acquire JL French Automotive Casting's Whitham plant in Essex in the UK. It had unsuccessfully attempted six months ago to acquire the plant. Two other die-casters, one each from China and Spain, have also shown interest in the Whitham plant.

Amtek has been expanding its presence in the UK for the last few years. In 2005, it bought Halberg Guss (Bourne), one of the largest die-casters in the UK.

The sale of the plant looks complicated as the acquirer wanted assurance from Ford Motors, JL French's main customer, that it would continue its contract with the plant post-acquisition. Even the price of the acquisition depends on the assurance. However, with Ford itself undergoing a restructuring process, it is unlikely that the auto major would make any commitments.

The administrator of the plant, BDO Stay Hayward, would look for a quick solution as delay in selling the plant might force it to pull down shutters. The plant, which buys nearly 500 tonne aluminium alloy ingot, is losing over Rs. 50 crores a year. JL French put up its Whitham and Wales units for sale after it had filed for bankruptcy in April last year.

A clutch of foreign financial investors have invested in the Rs. 900 crore-Amtek Auto. Warburg Pincus tops the list with nearly 10% stake. The list of other foreign financial institutions includes CLSA, HSBC Global and Oppenheimer Fund. Swiss Finance Corporation is in the process of acquiring stake through subscription of preferential shares.

Read the Business Standard article.

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