RIL's German unit files for bankruptcy

The global economic downturn has hit India’s most valued company Reliance Industries, forcing it to on Wednesday declare as insolvent its German unit Trevira, a specialty polyester manufacturer.
Reliance Industries had acquired Trevira five years ago for Rs 440 crore and group Chairman Mukesh Ambani had announced the deal at the Annual General Meeting that year. This acquisition in 2004 had propelled Reliance to the position of the world’s largest polyester fibre and yarn producer.
“Trevira filed an application with the Augsburg Court in State of Bavaria for the commencement of insolvency proceedings with a restructuring plan,” said RIL in a statement here. Reliance is the latest in the list of Indian conglomerates that have been hit by the financial Tsunami on their global acquisitions.
Trevira faced severe demand contraction in its principal market segments due to the global financial crisis. Trevira, which was part of German industrial conglomerate Hoechst AG before being acquired by Reliance, manufactures high-value branded polyester fibers and filament yarns for the automotive industries, home textiles as and for technical applications.
The filing for insolvency follows attempts by the company to overcome the impact of industrial slowdown in Europe, particularly of the automotive and textile sectors to which it is an important supplier.