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Sakthi buys German auto-component maker for Rs598 cr

Sakthi buys German auto-component maker for Rs598 cr
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First Published: Tue, May 01 2007. 12 00 AM IST
Updated: Tue, May 01 2007. 12 00 AM IST
Chennai: Sakthi Auto Component Ltd, a subsidiary of Coimbatore-based Sakthi Sugars Ltd, said that it has acquired Intermet Europe, an auto-component maker four times its size, for Rs598 crore.
This will help the company penetrate the European market, and access technology that is “10-15 years ahead of ours”, said chairman and managing director M. Mani-ckam. This is Sakthi Auto’s first overseas acquisition.
Intermet Europe had revenues of Rs1,000 crore in fiscal 2007 and employs about 1,500. It has two plants in Germany and one in Portugal, all of which manufacture precision castings in ductile iron for the automotive industry, with a total annual production capacity of 165,000 tonnes.
The components, which are part of the smaller tools in a vehicle, are made of more resilient iron.
Sakthi Auto’s domestic operation has a production capacity of about 60,000 tonnes, and reported revenues of Rs250 crore for the 2007 fiscal year.
The company said it funded the acquisition through a combination of debt and equity.
About Rs345 crore was raised through debt, while the rest was raised through issuance of shares—Rs184 croreof convertible preference shares to outsiders, Rs46 crore raised by selling equity shares to the parent, Sakthi Sugars, and the rest (Rs23 crore) from the internal accruals of the parent.
The merged entity, to be called Sakthi Automotive Group, while looking to retain the European clientele, would concentrate on Indian and other Asian markets, as the auto-component industry is growing at 25% in India compared with a 3% growth inEurope, said Manickam.
The company will be headquartered in Saarbrucken, Germany.
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First Published: Tue, May 01 2007. 12 00 AM IST
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