On 1 February 2022, the assets of AWUKO Abrasives Wandmacher GmbH & Co. KG was acquired in an insolvency proceeding through a step-down subsidiary CUMI GmbH, Germany.
CUMI GmbH was renamed as CUMI AWUKO Abrasives GmbH, Germany (CAAG) after the purchase of assets viz., fixed assets, leased assets, brands & trademark, patent, technical know -how and other intangible assets excluding cash & receivables. CAAG is engaged in the business of manufacturing coated abrasives for wood and leather applications, the company said in a stock exchange filing.
The financial position of CAAG has continued to remain challenging. Under performance is due to the product & market limitations of the entity, intensified price competition in the backdrop of global overcapacity, low utilisation and piling up of inventory, it added.
Additionally, the continuing geo-political crisis & macro-economic challenges render the input costs such as energy, wages/ labour and other costs very high. Despite numerous turnaround plans for implementing cost-saving measures, improving operational efficiencies and exploring new revenue streams and periodic investments made by the parent, the subsidiary continues to show no signs of recovery. The structural market challenges and increased cost pressures render the viability of its future operations very uncertain, the company said.
CUMI International the shareholder of CAAG has decided to proceed with the winding down of the entity, it said.
Carborundum Universal said CAAG is not a material subsidiary and the winding down will not adversely affect its business.
Based on initial estimation, the likely impact arising from the winding down of the subsidiary is estimated to be in the range of Rs.110 crore to Rs.130 crore. This estimate is subject to change depending on the realisation of assets and other obligations, it added.
For the financial year ended 31st March 2025, CAAG posted a turnorver of Rs. 93 Crore (1.9 per cent of the consolidated revenue of Carborundum Universal) and had a Net worth of Rs. 74 Crore.
