Amtek Auto Swings to Loss Amid Asset Sales to Trim Balance Sheetby
Rising finance costs help drag net loss to 9.9 billion rupees
Company selling off stakes in overseas units to cut debts
Amtek Auto Ltd., a cash-strapped Indian supplier of car components, swung to a loss for the year ended September.
The company, which missed a deadline to pay 8 billion rupees of bonds in September, reported a consolidated net loss of 9.87 billion rupees ($148 million) against a net profit of 8.48 billion rupees last year. Total income slipped 3 percent to 152.13 billion rupees in the year, while finance costs surged 33 percent to 14.70 billion rupees, the New Delhi-based company said in a stock exchange filing.
Amtek, which supplies carmakers including Ford Motor Co. and Maruti Suzuki India Ltd., is looking to sell minority stakes in its overseas units to raise funds and cut debt. The sale of stakes of as much as 40 percent will constitute about half of the company’s debt-reduction plan, John Flintham, senior managing director of the company, said earlier this month. Shares of the company have fallen 80 percent in the past 12 months, closing at 42.75 rupees Friday.
For the quarter ended September, it reported a stand-alone net loss of 1.59 billion rupees versus a net profit of 743.7 million rupees in the same period last year.
It has appointed Morgan Stanley as adviser to help with the debt reduction plan.
Creditors of the auto-part maker were shocked in August after a local rating company cut its credit score by four levels in one stroke. Two local debt funds of JPMorgan Chase & Co. that bought Amtek debt restricted redemptions after a string of investors demanded their money back.