| waiting for Mr. Right
Calcutta, Aug. 26: Maruti Udyog Ltd (MUL), Tata Engineering and Ashok Leyland are believed to be among the seven companies bidding for the assets of beleaguered auto maker PAL-Peugeot Ltd (PPL).
Sources in ICICI, which is the custodian of PPL’s assets, said Mumbai High Court has already appointed a receiver and asked him to invite bids for the assets. “The bidding process is expected to start next week,” he added.
Besides the three, others who have shown interest in PPL’s assets include Hyundai Motors, Volvo International, Skoda Motors and Kia Motors of Malaysia.
“The PPL facility at Kalyan near Mumbai has very good prospects if properly managed. Moreover, the assets can be used with a little modification and upgradation by companies like Maruti, Telco and Ashok Leyland, which have huge requirement for diesel engines,” sources said.
Maruti, for instance, has a substantial requirement for diesel engines for the Zen and Esteem which it sources from Peugeot.
Sources said PPL’s assets perfectly match Maruti’s requirements and that is why the country’s largest car maker is keen on entering the bidding process.
The Maruti top brass, however, could not be contacted for comment despite several attempts made by The Telegraph.
PPL, the erstwhile joint venture between Premier Automobiles (PAL) and French automaker Peugeot, has a debt burden of over Rs 125 crore. The banks and financial institutions led by ICICI moved a winding up petition in the Mumbai High Court in order to realise their dues from the car maker.
Sources said the ICICI has an exposure to the tune of Rs 53.11 crore while StanChart and Hong Kong and Shanghai Banking Corp (HSBC) have Rs 37.5 crore and Rs 10 crore respectively.
PAL now has a 64 per cent stake in PPL following the acquisition of Peugeot’s 32 per cent stake in the joint venture. Peugeot had pulled out of the joint venture in 1997 following the dismal performance of the company.
The PPL plant, spread over 7.23 sq. metres in Kalyan, has a workforce of over 1,300.
Earlier, the promoters planned to spin off the joint venture’s assets into strategic business units, including the press shop, engine assembly and the car assembly plant.
Sources said the intention behind the plan was to lease the facilities to third parties for generating revenues.