Latest News | Minda Corp's Germany-based Subsidiary Files for Insolvency
Get latest articles and stories on Latest News at LatestLY. Auto component maker Minda Corporation on Tuesday said its Germany-based subsidiary has filed for insolvency after the company decided against making further investments in it.
New Delhi, Jun 9 (PTI) Auto component maker Minda Corporation on Tuesday said its Germany-based subsidiary has filed for insolvency after the company decided against making further investments in it.
The company's board had met on June 9 to review the request for further financial support to Minda KTSN Plastic Solutions (MKTSN).
After extensive deliberations and considerations on the current and future cash flow requirements of MKTSN clubbed with COVID-19 pandemic impact, the board decided not to undertake further financial exposure in the German arm and advised that the capital be allocated for growth and profitable business opportunities, Minda Corporation said in a statement.
"Thereafter, MKTSN has today filed for insolvency in Germany," the statement said.
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Minda had acquired the firm, a manufacturer of kinematic and non-kinematic plastic components for the automotive industry, in 2007.
The company said it has already infused more than 35 million euros in MKTSN.
"We expect a positive outcome for all our stakeholders in the long run despite the insolvency filing. We are focusing on channelising our precious capital towards tremendous business opportunities of profitable growth," Minda Corporation Chairman and Group CEO Ashok Minda said.
Importantly, over the years, the group has gained expertise in plastic technology to build kinematic and non-kinematic plastic parts and set up business in India for light weighting and value added interior kinematics parts which is expected to grow to around Rs 200 crore in five years with a double digit profitability, he added.
Minda Corporation Group CFO R Laxman said MKTSN had been operating in challenging and competitive market in Europe.
"We truly left no stone unturned to improve the fortunes of MKTSN over the years. However, the onset of COVID-19 has rendered all our and MKTSN's efforts in vain," he said.
The subsequent reallocating of resources is expected to add to shareholder value in the long run, Laxman added.
(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)