Kolkata: Kolkata-based chartered accountant-turned-businessman Pawan Kumar Ruia has lost control of a key manufacturing unit of the French auto component maker it acquired recently, Groupe Preciturn, after failing to repay the creditors of the firm €1 million (Rs6.9 crore) that was due.
Groupe Preciturn’s factory at Thiers in central France, which generated €800,000 in monthly revenue until production was suspended, has been declared bankrupt and seized by a commercial court.
Asset loss: Pawan Kumar Ruia. Photo: Indranil Bhoumik/Mint
Ruia, who heads the eponymous group, had in August acquired the two manufacturing units of Preciturn for an undisclosed sum from a court-appointed receiver.
Founded in 2002, Preciturn was put under court receivership in 2009 after it couldn’t clear its dues.
The commercial court has now invited bids from potential investors to choose a new owner for the Thiers plant. Production at the factory was suspended two weeks ago for want of working capital, according to Mathieu Burthey, Preciturn’s founder and president. “Soon after taking over Preciturn, Ruia said he was cash-strapped,” Burthey said in a phone interview from France. Ruia, according to him, had to immediately bring in €1 million, “and only part of it in cash”, to repay creditors.
“We soon realized that Preciturn was never his (Ruia) top priority,” Burthey said. “If that were so, he shouldn’t have, in the first place, taken over the firm.”
Ruia didn’t respond to queries on the story.
Also under Ruia’s control is Preciturn’s relatively smaller factory at Monistrol-Sur-Loire in France. It isn’t immediately affected by the court proceedings against the Thiers factory. But the Monistrol-Sur-Loire factory, too, needs “urgent support” from the Ruia Group, Burthey added.
After acquiring a number of troubled Indian firms such as Jessop and Co. Ltd and Dunlop India Ltd, the Ruia Group began expanding outside India in 2008 with the acquisition of Schlegel Automotive Europe Ltd from private equity fund CVC Capital Partners. The UK-based firm makes rubber sealing systems for cars.
Between May and August this year, the Ruia Group concluded agreements to acquire four financially stressed auto component manufacturers—two in France and one each in Turkey and Germany. In August, Ruia stepped down from the boards of Indian firms, Jessop and Dunlop, to “focus” on his group’s global acquisitions.
But he has already dropped the planned acquisition of at least two of them because of his inability to repay creditors.
In India, the cash-strapped Ruia Group is struggling to keep tyre maker Dunlop afloat. The firm is currently facing a wind-up petition filed by EV Mathai and Co., an unsecured creditor, and the Ruia Group hasn’t made much effort to prevent the liquidator of the Calcutta high court from seizing Dunlop.
A spokesperson had, however, said the Ruia Group was opposing EV Mathai’s wind-up petition.
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