The Hindu : Business : M&M arm to merge Amforge's Chakan unit

Online edition of India's National Newspaper
Tuesday, May 31, 2005

Business

Business

M&M arm to merge Amforge's Chakan unit

Staff Correspondent

MUMBAI: The board of directors of Mahindra Automotive Steels Pvt. Ltd. (MASPL) and Amforge Industries have approved the proposal to merge into MASPL the demerged forgings undertaking of Amforge at Chakan. The transaction involves the demerger of the Chakan unit of Amforge and its merger into MASPL through a scheme of demerger and arrangement. The scheme would be effective upon the Mumbai High Court giving effect to it.

MASPL, a wholly-owned M&M subsidiary, had already initiated steps to set up a machining line, which, combined with the forgings business, would establish it as one of the largest integrated forgings players in India. The Chakan forgings business of Amforge supplies its products to reputed OEMs such as Tata Motors, Maruti Udyog, and Ashok Leyland, apart from M&M and recorded sales of Rs. 210 crore in 2004-05. At Chakan, Amforge has a capacity of 40,000 tonnes annually for crankshafts, and connector rods.

The shareholders of Amforge will get a share in MASPL, which will be a part of Mahindra Automotive Systems and Technologies (MSAT).

Hemant Luthra, President, MSAT, said, "It is too early to talk about the valuation of the transaction.The appropriate exchange ratios and values will be determined independently.The forgings business of M&M will have a turnover of Rs. 300-350 crore in the next two years. Mr. Luthra said MSAT, which had a turnover of around Rs. 900 crore, had aggressive plans in developing the engineering services and components as an independent business.

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