The Hindu Business Line : Amtek Auto puts potential hedging loss at $18 m over 2 years

Coimbatore, March 28 Amtek Auto Ltd (AAL) has put the potential loss due to fluctuations in currency markets at about $18 million in the next two years.

But the company is confident of mitigating the impact of the currency turmoil and promoters have assured to bring in a matching amount to meet any obligation that may arise.

In a communication to the BSE on Friday, AAL said that it would like to clarify on ‘recent turbulence in the global currency market and its resultant impact’ on it. The company has undertaken ‘hedges and swaps as a normal practice’ on the basis of its underlying exposure of loans/convertible bonds/exports in various currencies. The currency market has in the recent past been highly volatile. Owing to such volatility, some of the “hedges and swaps could expose the company to potential losses up to $18 million over a period of next two years”, AAL said in its communication.

It has taken proactive measures to “restrict the same and any improvement in the currency market from here will mitigate the above”. AAL said “The promoters have undertaken to bring in the matching amount to meet the obligation, should they arise”, in the form of 10-year zero-per cent NCD/preference shares. The company said its future business outlook continues to be robust and it is poised for growth “organically and inorganically within and outside India”.

The company had reported an EBITDA of Rs 805.9 crore and a net profit of Rs 428 crore for the financial year ending June 30, 2007 (audited). In the first half of the current financial year the company has reported an EBITDA of Rs 464.5 crore and a net profit of Rs 235 crore (un-audited). It has recently announced diversification into the railways segment to set up a project for manufacture of freight wagons which holds huge potential for future growth.

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