The Hindu Business Line : Autoline calls off deal with Stokota

Pune June 20 Auto component manufacturer Autoline Industries Ltd (AIL) has called off a Rs 68-crore deal to acquire 51 per cent stake in Belgian company Stokota NV. The MoU signed earlier this February has been terminated.

Mr Gopal Patwardhan, Director of AIL, said that the financials were to be provided by Stokota were within a prescribed timeframe to make a second trans-payment.

"Since the information was not given, the MoU automatically lapses," he added.

What he did say was that AIL could have pursued the matter, but has obviously chosen not to.

While company officials maintain that they might relook at the deal later, the fact remains that with local auto industry booming and foreign companies setting up shop nearby, more attractive offers are coming Autoline's way.

Mr M. Radhakrishnan, Joint Managing Director, confirmed that AIL was looking at alternative proposals for contract manufacturing and technical collaboration locally.

"Several foreign companies like GM, Volkswagen and Daimler Chrysler are setting up manufacturing facilities in the Chakan Talegaon area and we have had many enquiries. We may look for deals that are more beneficial than the Stokota deal."

As per the February MoU, AIL would have had to pay Rs 48 crore in cash and the remaining by way of equity for the majority stake.

However, following the termination, the foreign company has returned the 2,50,000 euros that had been paid as signing amount.

Mr Radhakrishnan maintained that since they had not factored in Stokota's value or benefits in AIL's projections, their business would not be affected; the Rs 450-crore target for the current fiscal remains.

Last month, AIL acquired 51 per cent stake in engineering design company Detroit Engineered Products Inc (DEP) of the US for a total consideration of $7.65 million.

While enabling it to ride the global auto design outsourcing wave, the move will also help it to consolidate its local base.