Amtek hasn't approached us for new loans yet: Lenders

Mumbai: Even as cash-crunch hit Amtek Auto informed exchanges that it's in advanced talks with banks for fresh funds to repay its Rs 800 crore debt, lenders Tuesday denied any such discussions and said they've serious reservation about further lending to the auto component maker.

"We have not been approached by them yet. Even if they do, we have reservations because we don't see any cash flows for the company," said one of the bankers which is part of the consortium of a dozen lenders.

"There is no formal communications from the company asking for funds," said another banker.

Lenders have an exposure of around Rs 8,000 crore to Amtek Auto which is a part of Amtek Group, the component manufacturers with global presence. The group owes over Rs 26,000 crore to 32 bankers which include State Bank of India, ICICI Bank, Axis Bank, Bank of Baroda, Bank of India, IDBI Bank, Bank of Maharashtra and Uco Bank among others.

Majority of the lenders have exposure in the form loans while others have by way of bond subscriptions.

The Delhi-based company has missed payments on its Rs 800 crore worth of five-year foreign currency bonds yesterday that got matured on September 20.

There are more than 80 investors in now-defaulted bonds. The domestic subscribers to the bonds include Axis Bank, Karur Vasya Bank, Syndicate Bank, and Corporation Bank among others.

The company, however, today informed the exchanges in separate mail that it is in advanced talks with banks and financial institutions for raising funds to repay the bond holders.

"We wish to clarify that the company is in advanced discussions with various banks and financial institutions for realignment of its debt obligations," Amtek Auto said in filings to BSE and NSE today.

The company's response came after NSE and BSE sought clarification from Amtek on reports that the firm was in talks with banks to find a solution to its financial crisis.

On September 9, Sebi had ordered a probe into Amtek grouparm Castex Technologies for alleged share price manipulation and for asking its investors to convert their bonds.

On July 31, Castex informed the BSE that its board had decided to mandatorily convert all the outstanding bonds of USD 80.80 million out of foreign currency convertible bonds issue of USD 130 million. The conversion date for conversion of bond into equity shares, would be September 10, 2015.

Last month, JP Morgan Mutual Fund had restricted redemptions from two of its debt schemes-short term income fund and India treasury fund. Following a decline in NAVs (net assets value) of the schemes due to fund house's exposure to Amtek Auto's debt papers. These schemes have a collective exposure of about Rs 200 crore in Amtek Auto.

Last week, the lenders had said they had ordered a special audit of Amtek Auto books before taking a call on extending further loans to the Delhi-based auto component maker.

The lenders had decided to go in for the foreign audit of its books after a joint lender forum meeting held on September 10.

Further confounding its troubles, on September 16, global rating agency S&P cut the credit ratings of Amtek Global, the group's Singapore-based subsidiary on parent firm's woes.

"The downgrade of Singapore-based Amtek Global Technologies reflects heightened liquidity risks at the parent Amtek Auto. We see a risk that Amtek Auto may not have sufficient liquidity to meet its interest or debt obligations, which could lead to a default at Amtek Auto, or a debt restructuring," S&P Rating said in a statement.

Shares of Amtek Auto plunged 11.46 per cent to Rs 45.95 today following reports that it has defaulted on a Rs 800 crore bond payment. During the intra-day the stock had plunged 20 per cent on the BSE, whose benchmark Sensex tanked 541 points.

Amtek stocks are down a whopping 81 per cent from its 52-week high of Rs 243, most of which it lost after the cashflow issue surfaced.