Amtek Auto may lose up to $18 million due to global currency crises

28 Mar 2008

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Automotive components manufacturer Amtek Auto Ltd., in a filing with the Bombay Stock Exchange today, said it expected a possible loss of up to $18 million over the next two years due to volatility in global currency prices. However, it said that it was being pro-active to mitigate such losses.

The company said it had undertaken hedges and swaps as a normal practice on the basis of its underlying exposure of loans, convertible bonds and exports in various currencies. However, due to the sustained volatility in global currency markets, some of these hedges and swaps could expose the company to a potential loss of $18 million in the next two years, it said.

In order to match such potential losses, the founders have undertaken to bring in the amount through 10-year debentures or preference shares at 0 per cent. In spite of these setbacks, Amtek Auto is quite positive about its future prospects. In the statement, it expressed an intention to grow both organically and through acquisitions in the near future.

It has recently announced diversification into railways segment to set up a project for manufacturing freight wagons. On 22 March, it had announced a joint venture with a leading North American wagon supplier American Rail Car Industries to produce 5000 such wagons annually. Recently in the Union Budget, the Indian Railways had announced plans to procure 20,000 wagons this year.

The stock ended 3.56 per cent up at Rs.260.40 on the Bombay Stock Exchange today, on a day the benchmark indices recorded impressive gains.

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