Kolkata: Chartered accountant-turned-takeover specialist Pawan Kumar Ruia has washed his hands of Meteor Gummiwerke KH Badje GmbH and Co.—an embattled German automotive component maker that he was to acquire from a trust representing its controlling shareholders—after he failed to inject cash for a rescue.
Ruia had in May last year announced that he had concluded a deal to take over Meteor Gummiwerke for an undisclosed price, described by the German firm as “symbolic” in one of its statements.
The acquisition of this firm, along with two others announced in close succession last year, would have catapulted the Ruia Group to a leadership position in manufacturing rubber sealing systems for the automobile industry.
Pawan Kumar Ruia, chairman, Ruia Group. Indranil Bhoumik/Mint
Meteor Gummiwerke was, by far, the biggest by revenue in a series of acquisitions announced between May and September last year.
But, strapped for cash, the Ruia Group had to abandon almost all the acquisitions one by one—in France, Turkey and Germany—of rubber sealing system makers it had announced in 2011.
Meteor Gummiwerke had in 2010 earned €222 million (Rs 1,438.5 crore today) in revenue from the sales of rubber sealing systems to car makers such as Bayerische Motoren Werke AG (BMW), Daimler AG, Fiat SpA, Renault SA and Porsche Automobil Holding SE.
Founded in 1954, Meteor Gummiwerke has three plants in Germany, two in the Czech Republic and one in the US. It employs at least 2,500 people.
After the Ruia Group failed to infuse cash to revive it, Meteor Gummiwerke on 13 January filed for bankruptcy and an administrator was appointed by a German court, according to a statement issued by the administrator.
The Ruia Group’s takeover of Meteor Gummiwerke was to be concluded in early October. The firm had even posted a statement on its website saying the deal had been concluded, with the Ruia Group paying shareholders the price agreed upon and bringing in the cash it had committed to revive the firm— an indication that the deal collapsed at the 11th hour.
In an emailed statement, the Ruia Group said: “(At) the time the management (of Meteor Gummiwerke) decided to take the company to insolvency (administrator), Ruia Group was neither in management of the company nor any shares were transferred to it.”
Emails sent to Burkhard Bruhl, Meteor Gummiwerke’s chief executive officer, were not answered.
The insolvency administrator is currently helping Meteor Gummiwerke find a new buyer, and the Ruia Group is “out of the game”, according to Hildesheimer Allgemeine Zeitung, a German newspaper.
A contract was signed but did not become effective because the Ruia Group did not pay, said a spokesperson for the insolvency administrator in an emailed statement. As a result, Ruia never became the owner of the company.
Christopher Seagon, the administrator, “is now stabilizing the business operations and will likely set up a process of finding a new investor,” he added. A statement by Seagon earlier said the firm’s Czech and US subsidiaries had been kept out of the insolvency proceedings.
In October, Ruia had said his acquisition of Standard Profil AS, a Turkish firm, was “under review” in the light of the “global economic slowdown”. He later admitted to have abandoned the proposed acquisition. The Ruia Group had announced its plan to acquire Standard Profil in May.
Last month, the Kolkata-based group headed by Ruia also lost control of a key unit of Groupe Preciturn, a French auto component maker that it was to acquire. In early December, one of Groupe Preciturn’s units was declared bankrupt and seized by a commercial court in France.
In India, the Ruia Group is under fire from tyre maker Dunlop India Ltd’s creditors. The group acquired Dunlop in 2005. A number of creditors have filed wind-up petitions in the Calcutta high court seeking appointment of an administrator to take over Dunlop’s assets. The company has suspended operations and has asked the court for time to prepare a repayment plan.
In an interim order, the court restrained Dunlop from transferring its assets, scuppering the Ruia Group’s plans to transfer to itself the rights to 100-odd trademarks currently owned by the beleaguered tyre maker.