Amtek Auto launches sale of German Tekfor - sources

FRANKFURT (Reuters) - Loss-making Indian car-parts maker Amtek Auto is launching the sale of its German unit Tekfor, a business with sales of more than 500 million euros ($554 million), two people familiar with the matter said.

Amtek, which is on a drive to cut debt, has hired Morgan Stanley to organise the sale of the maker of driveline components formerly known as Neumayer Tekfor, just two years after buying it out of an insolvency, the sources said.

Amtek was not immediately available for comment and Morgan Stanley declined to comment.

Shares of Amtek almost doubled in a day last month after the company said it may sell stakes in overseas business to pare debt.

 

While precise earnings figures are not available and information packages have not yet gone out to potential bidders, one of the sources said his estimate for Tekfor's annual earnings before interest, taxes, depreciation and amortisation (EBITDA) was about 100 million euros.

Amtek is hoping to reap a valuation of 6-7 times core earnings, in line with that of listed peers, the source said.

(Reporting by Arno Schuetze; Additional reporting by Aditi Shah in New Delhi; Editing by Georgina Prodhan)