After three years of acquiring a German Company, Borosil Renewables Ltd (BRL) has decided to give up and has gone ahead and filed for insolvency of the German Company.
- German operations have been a significant overhang on BRL’s overall financials since its acquisition.
- BRL’s management attributes the German failure to local macros; flooding by cheap Chinese modules impacting local module production and consequent drop in the local solar glass demand.
- From July 4, 2025 — the date of the insolvency filing — GMB’s operations will be overseen by a court-appointed administrator in Germany. BRL will no longer account for GMB’s financial losses. However, Borosil will have to account for any impact on account of the insolvency resolution process in the forthcoming quarterly results.
- German operations were resulting in Rs 9 cr of loss every month.
- BRL’s exposure as of March 31, 2025 in the German subsidiary and step-down subsidiary is Euro 35.30 mn
- BRL reported a consolidated PBT loss of Rs 74 cr in FY 25. Insolvency process therefore should allow the Company to turn back into profits.
Overall, it seems a good and logical move by BRL.
This case is another example of how difficult it can be to turnaround an international acquisition.
During good times, managements become overconfident and go for ambitious expansions. We as analysts and investors also celebrate and then the reality bites !