Mumbai: Amtek Auto will not buy back its $250 million overseas convertible bonds as it wants to conserve cash to tide over the slowdown, a senior official said, denying market talk about a redemption.
“We don’t contemplate any such move as we prefer to hold the cash in hand in these uncertain times,” Chief Financial Officer Santosh Singhi told Reuters over telephone.
Amtek, which has Rs5 billion in cash, raised the $250 million in mid-2006 specifically for acquisitions and has used up almost all the money for two overseas buys and their expansion, he said.
The bonds are convertible at Rs458 in 2011, about eight times the trading price on Friday.
The speculation about a buyback started after the central bank at the weekend relaxed rules for firms to buy back foreign convertible bonds after shares prices slumped amid the global financial crisis.
Amtek shares are down 87% so far in 2008 compared to a 54% fall in the benchmark index. At 12:51 p.m., the shares were up 6.9% at Rs55.50 in a weak Mumbai market.
The company, one of India’s largest auto parts makers, is battling an automobile slowdown in India and globally.
Indian car sales dropped by nearly a fifth in November, the worst fall in eight years and U.S. car sales dropped to their lowest level since 1982.