Restructuring involving revival of loss-making company and achieving economies of scale

The transferor company had made heavy capital investments to manufacture large industrial-size bearings. However, the business did not progress as projected. Furthermore, heavy capital investments and moderate manufacturing of industrial-size bearings resulted in the underutilization of capacities, thereby resulting in the company incurring huge operating losses. The losses made the transferor company’s net worth negative.

The client, situated in Bengaluru, India, is a global leader in the manufacture of bearing and lubrication systems. The client had separate entities in Bengaluru. The transferor company was engaged in the manufacturing of oil seals, large industrial-size bearings and rendering technical services. It sustained operating losses.

Nexdigm’s overall project management approach helped achieve the management’s objective of completing the project within the desired timeline, delivering to the management’s expectations. The structure brought substantial tax savings due to carried forward losses. The merger ensured the revival of prospects of a loss-making company and offered an optimum product mix for the customers.