Amtek Auto’s expansion made it insolvent
Once Amtek was amongst the top 3 automotive brands of India. Now it is in the first list of 12 companies to undergo insolvency proceedings…
Once Amtek was amongst the top 3 automotive brands of India. Now it is in the first list of 12 companies to undergo insolvency proceedings by NCLT. Once
History:
It started in 1987, with a plant in Sohna.
It operates 7 divisions, 32 component centers in Delhi NCR, and other locations.
It started 3 joint ventures with French, Japanese and American automotive companies.
It’s FY 17’s revenue is INR 2000 crore ( approx) and, it has 6000 employees.
It’s revenue grew 30–40% between FY2010 and FY2014, annually.
How did it land in trouble?
Aggressive expansion from 2013–2015 cause the trouble.
Profits were insufficient to service the interests. For the past three years, it’s not profitable.
It’s consolidated debt as as a holding company is INR 14000 crore ( approx) as debt to creditors.
It’s other group companies Castex ( debt of INR 6285 crore), Amtek Ring Gears ( debt of INR 2000 crore) and Metalyst ( debt of INR 3473 crore) are also in the second list of 28 companies, undergoing bankruptcy proceedings.
Profits were insufficient to service the interests.
What’s the future?
6 business houses have bid, including Bharat Forge.
Liberty House ( UK based), which had bought its UK business, is bidding for India’s business.
Liberty House turned around Amtek’s UK’s business.
Worth your time: Economist’s take on India’s bankruptcy crusade here & here ( 3 stories free/ month).