The Hindu Business Line : Exim Bank, SBI may pick up stake in Ucal's US arm

EXIM Bank of India and State Bank of India are expected to invest in the equity and debt respectively of the US-based AMTEC Precision Products, a company that has just been acquired by Ucal Fuel Systems Ltd.

Exim Bank is likely to take a 20 per cent stake company, for $4.4 million (Rs 20 crore), but the move is subject to regulatory clearances, sources close to the deal told Business Line. It is understood that Exim Bank will have the option to exit after five years.

State Bank of India, through its New York Bank, has agreed to assume the entire debt of AMTEC, which amounts to $16 million, against a corporate guarantee given by Ucal.

Ucal Fuel's Managing Director, Mr K. Jayakar, told Business Line today that the acquisiton cost was $22 m (Rs 100 crore). This is apart from the liabilities of $16 million, likely to be taken over by SBI.

The Chennai-based Ucal Fuel Systems Ltd, which produces carburettors and fuel injection parts in collaboration with Mikuni Corporation of Japan, announced the completion of AMTEC acquisition.

AMTEC consequently has become a wholly-owned subsidiary of Ucal. Ucal's consolidated sales stands at $140 m (Rs 630 crore), according to a company release.

AMTEC is based in Elgin, Illinois. The company offers precision machined and specialised injection moulded products to OEMs such as Siemens, Emerson, Cummins and Parker.

For the year ended May 31, the company's turnover was $72 million.

This is the first time an Indo-Japanese joint venture has acquired a company in the US, the press release from Ucal notes.

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