Auto component firm Minda Corp’s German subsidiary files for insolvency
Minda Corporation had acquired Minda KTSN Plastic Solutions, a maker of kinematic and non-kinematic plastic components for the automotive industry, in 2007 and has since infused more than Euro 35 million in MKTSN
Minda KTSN Plastic Solutions GmbH & Co KG (MKTSN) - the German subsidiary of auto component
major Minda Corporation - has filed for insolvency in Germany. “Minda Corporation Limited’s Board of Directors held a meeting on June 9, 2020 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,” said the company in a press release.
Minda KTSN Plastic Solutions, 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 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 per cent and ROCE by 5 per cent.”
He stated, “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. Minda Corporation is Future Ready and well positioned to address the technological shift due to change in customer requirements, new trends and government regulation. We are investing in R&D and new technologies such as light weighting, electronics and EV related products.”
R Laxman, Group CFO at Minda Corporation, added, “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.”
For over six decades, Minda Corporation Ltd has a major presence in automotive industry and is one of the leading manufacturers of automotive components for the OEMs
. The $ 645 million Group caters to the leading passenger vehicle, commercial vehicle, motorcycle & scooter, off-road vehicle & tier-1 manufacturers through its four verticals i.e. mechatronics, information & connected systems, plastics & interiors, and aftermarket. The aftermarket segment in India has a strong distributorship of about 500 dealers.