Minda Corporation’s German subsidiary filed for insolvency in Germany

NEW DELHI: Auto component maker Minda Corporation Tuesday said its German subsidiary Minda KTSN Plastic Solutions GmbH & Co. KG (MKTSN) has filed for insolvency in Germany.
Minda Corporation’s Board of Directors held a meeting Tuesday to review the request for further financial support to its German subsidiary Minda KTSN Plastic Solutions GmbH & Co. KG (MKTSN). 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 decided not to undertake further financial exposure in MKTSN and advised that the capital be allocated for growth and profitable business opportunities.

Thereafter, Minda KTSN Plastic Solutions GmbH & Co. KG (MKTSN) has today filed for insolvency in Germany.

MKTSN, a manufacturer of kinematic and non-kinematic plastic components for the automotive industry, was acquired by Minda Corporation in 2007. It has since infused more than Euro 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 of Minda Corporation said “We expect a positive outcome for all our stakeholders in the long run despite the insolvency filing. We are focusing on channelizing 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 added, “Importantly, over the years, the Group in India 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 5 years with a double digit profitability.”

R Laxman, Group CFO at Minda Corporation said MKTSN has 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. The subsequent reallocating of resources is expected to add to shareholder value in the long run”, informed Laxman.