‘Nothing to be worried for manroland customers, Indian operation goes normal’
-says Anil Bhatia, managing director, manroland India,
in a one-to-one conversation with SK Khurana, editor, P&P
Since manroland AG filed a petition to initiate insolvency proceedings with the jurisdictional district court at Augsburg, one may generally expect an uncertainty about the effectiveness of company’s operations in India. But it is not so, as talking about the move, manroland India managing director Anil Bhatia revealed that the customers of manroland India are major newspapers, packaging and commercial printers and they all understand the reasons behind the insolvency by manroland. Presently, a huge web press is under installation in the country and three more to follow in the coming year, with senior technical team already here from Europe. Besides, the installation of first sheetfed press with inline cold foiling will be completed in the coming months.
manroland India is a separate entity with independent operations and a strong organizational structure. The company is financially sound and stable to offer continued support to Indian customers. So the Indian operations of manroland remain unaffected by the petition filing to initiate insolvency proceedings of the company in Germany. And all operations including spares supply and service support to all customers in India will continue to run normally.
“There are different ways of restructuring and ‘insolvency’ is one which is the fastest, providing immediate protection to operations of a company when it becomes difficult to keep performing normally. Facing such difficulties, major companies in the US and Europe generally opt this tool of restructuring their operations. Thus, it is more effective way to restructure specially for non-family owned companies like manroland AG,” explained Anil, adding, “However, some pain will be realized internationally, but quick recovery is expected soon. Production at the company’s facility is normal. There shall be no impact of this proceeding on manroland India.” As India being the focus market for manroland AG, on asking the possibility of visit to India by any senior officials, Anil said, “Immediate priority is to re-structure before any board member comes to India.
Continuation of business operations secured
As per a recent press release, for the insolvent manroland AG, the provisional insolvency administrator Werner Schneider has secured an agreement for a so-called “Massekredit” (similar to debtor-in-possession financing). “Continuation of production and business operations at manroland is therefore secured,” said Werner Schneider, a financial auditor. “The company can continue to do business with customers and suppliers and we are sending a very positive signal to the market.”
Schneider is delighted that the financing agreement was reached within only a few days. “Immediate action was essential as an interruption of production does harm the company and makes the desired sales process more difficult,” said Schneider. The mass credit has a volume of Euro 55 million, thereof Euro 10 million in form of a cash drawing facility. A further Euro 45 million is a so-called ‘partial’ mass credit in which the lending banks release part of the forgone loans. The release ensures the required liquidity without the banks provide new debt. The financing secures fulfillment of liabilities with customers and suppliers that have placed or received orders with manroland after the company has filed for insolvency. Liabilities originated before the filing will be dealt with as part of the insolvency proceedings later in the process.
Notably, manroland AG recently filed a petition to initiate insolvency proceedings with the jurisdictional district court at Augsburg, after the negotiations with a potential investor failed on the home stretch. At the same time the company filed a request for self-administration in order to finalize the on-going restructuring efforts. The executive board of manroland aims to rescue key units within the framework of ongoing restructuring efforts as debtor in possession. The initiated insolvency procedure affords the opportunity to step up the restructuring process and guide the company through this difficult phase. Despite all the disappointment over the path that now has to be taken, the insolvency procedure as debtor in possession offers plenty of prospects because the company has compelling products, the necessary know-how, and an excellent team. With the planned entry of a potential investor and on a basis of a financing programme coordinated with the previous shareholders and banks, the company’s equity base would have been strengthened.
manroland AG has filed a petition to initiate insolvency proceedings in Germany, however this does not mean that the company is shutting down. This is a step towards quick restructuring of the organization, so that eventually we can emerge as a lean, healthy and strong organization. We have updated our customers of the current situation and all our customers have wholeheartedly expressed their support. We are thankful for their confidence in the brand,” said Anil Bhatia, managing director, manroland India.