17 FEB, 2012, 06.13AM IST, M V RAMSURYA & RAKHI MAZUMDAR,ET BUREAU
MUMBAI/KOLKATA: Steel manufacturer Adhunik Metaliks is in advanced talks to sell its unlisted forging subsidiary to automobile component maker Amtek Auto for Rs 230 crore, people close to the development said.
The subsidiary, Neepaz V Forge, manufactures forged products for automobile players such as Tata Motors, Ashok Leyland and Mahindra & Mahindra.
The deal size includes Rs 160 crore debt that Neepaz has on its books, these people said.
"Adhunik has now entered the final lap of negotiations with Amtek," one of the people quoted above said, adding that the deal is likely be finalised by April.
Adhunik will retain a minority stake in the forging unit and continue to supply raw materials from its Rourkela unit in Orissa to the forging plant located in Nagpur in Maharashtra, he said.
Adhunik and Amtek refused comment.
Kolkata-based Adhunik has been seeking a buyer for Neepaz for some time and had earlier engaged in discussions with German steel maker Thyssenkrupp and Japan's Sumitomo Corporation. Adhunik is selling the forging unit as it wants to focus on its core business, another person aware of the negotiations said.
"For the past six to eight months, Adhunik has been looking for a joint venture partner who can expand and grow the forging business," this person said. "The group is willing to offer the new partner management control to run the business as forging is not a core area for Adhunik."
Amtek Auto, which is India's second largest forging company after Bharat Forge, has been looking for local units to grow its capacity at a time when slow auto sales in the fiscal third quarter shaved off valuations of most Indian companies. Analysts say prospects have brightened for a strong fourth quarter with car sales in January growing 9% and sales in February being robust so far.
Shares of both Adhunik and Amtek gained on Thursday, a day when the country's benchmark stock index, Sensex, ended marginally lower. While Adhunik rose 1.9% to close at Rs 54.15, Amtek was up 2% at Rs 130.95 on the Bombay Stock Exchange. Adhunik has surged 24% in the past month, while Amtek has risen 23%.
(Source : http://economictimes.indiatimes.com/news/news-by-industry/indl-goods-/-svs/engineering/adhunik-metaliks-in-talks-to-sell-forging-arm-neepaz-v-forge-to-amtek-auto/articleshow/11920931.cms)
MUMBAI/KOLKATA: Steel manufacturer Adhunik Metaliks is in advanced talks to sell its unlisted forging subsidiary to automobile component maker Amtek Auto for Rs 230 crore, people close to the development said.
The subsidiary, Neepaz V Forge, manufactures forged products for automobile players such as Tata Motors, Ashok Leyland and Mahindra & Mahindra.
The deal size includes Rs 160 crore debt that Neepaz has on its books, these people said.
"Adhunik has now entered the final lap of negotiations with Amtek," one of the people quoted above said, adding that the deal is likely be finalised by April.
Adhunik will retain a minority stake in the forging unit and continue to supply raw materials from its Rourkela unit in Orissa to the forging plant located in Nagpur in Maharashtra, he said.
Adhunik and Amtek refused comment.
Kolkata-based Adhunik has been seeking a buyer for Neepaz for some time and had earlier engaged in discussions with German steel maker Thyssenkrupp and Japan's Sumitomo Corporation. Adhunik is selling the forging unit as it wants to focus on its core business, another person aware of the negotiations said.
"For the past six to eight months, Adhunik has been looking for a joint venture partner who can expand and grow the forging business," this person said. "The group is willing to offer the new partner management control to run the business as forging is not a core area for Adhunik."
Amtek Auto, which is India's second largest forging company after Bharat Forge, has been looking for local units to grow its capacity at a time when slow auto sales in the fiscal third quarter shaved off valuations of most Indian companies. Analysts say prospects have brightened for a strong fourth quarter with car sales in January growing 9% and sales in February being robust so far.
Shares of both Adhunik and Amtek gained on Thursday, a day when the country's benchmark stock index, Sensex, ended marginally lower. While Adhunik rose 1.9% to close at Rs 54.15, Amtek was up 2% at Rs 130.95 on the Bombay Stock Exchange. Adhunik has surged 24% in the past month, while Amtek has risen 23%.
(Source : http://economictimes.indiatimes.com/news/news-by-industry/indl-goods-/-svs/engineering/adhunik-metaliks-in-talks-to-sell-forging-arm-neepaz-v-forge-to-amtek-auto/articleshow/11920931.cms)
