Musashi, Bharat Forge Said to Mull Bids for Amtek German Arm

  • CIE Automotive also expresses preliminary interest in Tekfor
  • Amtek Auto hires separate adviser for Indian asset sale

Musashi Seimitsu Industry Co. and Bharat Forge Ltd. are among companies weighing bids for the German unit of cash-strapped car-parts maker Amtek Auto Ltd., people familiar with the matter said.

The New Delhi-based component supplier is seeking a valuation of more than $800 million for its Amtek Tekfor Holding GmbH unit, two of the people said, asking not to be identified as the information is private. Spain’s CIE Automotive SA has also shown preliminary interest in Tekfor and is analyzing the business, the Bilbao-based company’s external press office said in an e-mailed response to questions.

Amtek Auto has hired a separate adviser to sell some assets in India, according to three of the people. Mahindra CIE Automotive Ltd. and Bharat Forge have both expressed interest in purchasing part of Amtek Auto’s Indian operations, two people said.

The Indian company, which supplies carmakers including Ford Motor Co. and Maruti Suzuki India Ltd., is looking to sell stakes in its overseas units after missing a September deadline to pay 8 billion rupees ($120 million) of bonds. The company said last month it has received “a large number” of inquiries about the outright purchase of a couple of its international units, including Tekfor, from strategic buyers and financial investors.

“Amtek is under pressure from creditors to sell some assets,” Bharat Gianani, an analyst at Angel Broking Ltd. in Mumbai, said by phone Thursday. “The assets have strategic value and may be available at a lower valuation.”

Shares of Amtek Auto surged almost 10 percent to 47.55 rupees in Mumbai, the highest closing level since Sept. 21. Bharat Forge shares rose 2.1 percent to 865.15 rupees, the biggest gain in more than a month.

‘Liquidity Issues’

A deal would add to the $39.7 billion of acquisitions involving automotive component manufacturers globally this year, data compiled by Bloomberg show. The sale process for Tekfor is at an early stage, and Amtek Auto’s advisers have yet to distribute an information memorandum with detailed information on the German business, two of the people said.

Representatives for Musashi and the Mahindra group declined to comment. A spokesman for Amtek Auto didn’t answer an e-mail and two calls to his office seeking comment, while a representative for Bharat Forge said she couldn’t immediately comment.

A local ratings company cut Amtek Auto’s credit score by four levels in August, citing “persistent liquidity issues of the company leading to stress in debt servicing” and risks pertaining to its aggressive acquisition pace. Two Indian debt funds of JPMorgan Chase & Co. that bought Amtek Auto bonds have since restricted redemptions after some investors demanded their money back.

Amtek said last month it appointed Morgan Stanley to advise on a debt-reduction plan. It reported a consolidated net loss of 9.87 billion rupees for the year ended September, compared with a net income of 8.48 billion rupees a year earlier.

A purchase by Musashi would mark the Japanese company’s first acquisition in the past decade, according to data compiled by Bloomberg. Musashi, based in the central Japanese city of Toyohashi, makes parts for customers including Honda Motor Co. and Mitsubishi Motors Corp. It employs about 13,500 workers globally and has production sites in countries including Japan, the U.S., China, Thailand and Brazil.

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