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 by NCLT. Once
Published in
2 min readApr 26, 2018
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).