Reliance Industries unit Trevira files application for insolvency
June 3, 2009
Reliance Industries Ltd (RIL), India's largest petrochemicals company, said its European unit Trevira GmbH has filed an application for insolvency proceedings with a restructuring plan with the Augsburg Court in Bavaria, Germany.
In a release to the Bombay Stock Exchange, RIL said Trevira, one of the largest polyster fibres manufacturer in Europe, was under pressure due to industrial slowdown, particularly in the automotive and textile sectors to which it was a major supplier.
Last month RIL appointed restructuring expert Elke Bauerle as Trevira's managing director replacing Hemant Sharma.
European textile manufacturers are currently facing a considerable drop in demand for their products, while the cost of production and employment is increasing and competition from Asian and Eastern European industries is stronger than ever, RIL said.
Trevira, a leading manufacturer of polyster fibres, among others for automotive interiors, has suffered severe losses in sales due to the global economic crisis during the last months. In view of the extent of the crisis, Trevira had initiated restructuring measures, however, these do not prove to be sufficient anymore, it added.
RIL bought Trevira in 2004 for $100 million from the Deutsche Bank AG to become world's largest polyster maker.
Trevira, former division of multinational Hoechst, operates polyester plants in Germany, Belgium and Denmark with a capacity of 130,000 tones per annum. In 2008, Trevira had sales of around 323 million Euros. -Yogesh Sapkale[email protected]