rediff.com

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  

Rediff News  All News 
Rediff.com  » Business » Amtek Auto renews UK bid

Amtek Auto renews UK bid

January 15, 2007 09:52 IST

Amtek Auto is renewing its bid to acquire JL French Automotive Casting's Whitham plant in Essex in the UK, six months after its first abortive attempt.

Sources in the country's largest die-casting group confirmed the development. They said the talks between the two parties were at a preliminary stage and Amtek might take some time to table a formal bid for the 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. Two other die-casters, one each from China and Spain, have shown interest in the Whitman plant.

Sources in the know of the development said the sale of the plant was 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," said sources.

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 crore (Rs 500 million) 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 (Rs 9 billion) Amtek Auto.

Warburg Pincus tops the list with nearly 10 per cent 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. The company posted a net profit of Rs 161 crore (RS 1.61 billion) last year. The Amtek stock has been hovering around Rs 350 on the Bombay Stock Exchange.
Kausik Datta in Mumbai
Source: