Minda KTSN Plastic Solutions GmbH & Co. KG (MKTSN), the German subsidiary of auto components maker Minda Corporation, has filed for bankruptcy protection in Germany after its Indian parent decided not to infuse any future capital into the company.
“After extensive deliberations and considerations on the current and future cash flow requirements of MKTSN clubbed with COVID-19 pandemic impact, the board of directors have decided not to undertake further financial exposure in MKTSN and advised that the capital be allocated for growth and profitable business opportunities,” Minda Corporation said in a filing with the BSE.
“Thereafter, MKTSN has filed for insolvency in Germany,” the statement added.
Earlier in the day, the company’s board had met to review the request to infuse further capital in MKTSN.
The debt and other financial details as well as the employee base of the company have not been made available on the company’s website.
MKTSN, a manufacturer of kinematic and non-kinematic plastic components for the automotive industry, was acquired by Minda Corporation in 2007.
The company has since infused more than €35 million in MKTSN. The company is headquartered in Germany and has production sites in Pirna (Germany) and through its subsidiaries in Poland, Czech Republic and Mexico.
Ashok Minda, chairman and group CEO, Minda Corporation, said “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, with the view of enhancing EBITDA Margin and ROCE.”
“This move, is expected to enhance Minda Corp’s EBIDTA by 2% and ROCE by 5%,” he said.
He said over the years, the group in India had 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.
R. Laxman, Group CFO, Minda Corporation, said “MKTSN has been operating in a 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.”
