Amtek buys UK’s JLF, to relocate assets to India
The Delhi-based automobile component major Amtek Auto Ltd has acquired the entire assets of UK based JL French's (Witham) Ltd (JLF) for $35 million, reports Lalatendu Mishra.autos Updated: Jun 06, 2007 02:47 IST
Indian companies continue to acquire overseas assets and relocate to India. In the latest example, the Delhi-based automobile component major Amtek Auto Ltd has acquired the entire assets of UK based JL French's (Witham) Ltd (JLF) for $35 million (Rs 143 crore) in an all cash deal.
The assets will be relocated to India over the next three years. The acquisition will help Amtek expand its customer and product portfolio and obtain state-of-the-art technology in the aluminium high pressure die-casting segment.
JLF’s current sales revenues are at $60 million with 60 per cent capacity utilisation. Its facility produces HPDC aluminium for automotive application, and manufactures a variety of aluminium castings for auto majors likes of Land Rover, Jaguar, Trellborg, Ford and PSA (Peugeot).
Since the company has been making only moderate profits due to high operational costs, Amtek will dismantle the entire unit in three years and shift the production lines in phases to its facility at Ranjangaon, near Pune for cost-effective operation.
“Over the next three months, we will start transferring one third of the production lines in phases. Once we completely relocate the facility to India, we will have a profit of $8 million to $9 million per annum and we will get back the entire money in three and half years,” said Santosh Singhi, Chief Financial Officer, Amtek Auto. The acquisition has been funded from proceeds of bonds, which was floated in June 2006. “ We still have $100 million reserves,” said Singhi.
“We have appointed our global CEO John Flintham to take over the operations of JFL. “The company has 170 employees and all will be laid off after three years when the company shifts the entire operations to India. The cost of land and building would be sufficient to take care of the laying off expenses,” he said.