NewsCorporate ActionsSwitching Technologies Gunther to Sell Business Undertaking for INR 4.2 Crores Amid Financial ChallengesSwitching Technologies Gunther to Sell Business Undertaking for INR 4.2 Crores Amid Financial Challenges
Switching Technologies Gunther Limited (STGL) has agreed to sell its entire business undertaking to Canolli Manufacturing Private Limited for INR 4.2 crores. The decision comes amid declining financial performance, with STGL reporting a turnover of INR 7.71 crores, net worth of -INR 12.81 crores, and accumulated losses of INR 1,526.19 lakhs in FY 2025. The sale includes all assets, properties, intellectual property, business contracts, and identified employees. Shareholder approval is required, with an extraordinary general meeting scheduled for October 2025. The transaction is classified as a related party deal, with Canolli Manufacturing's shareholders having connections to STGL's promoter.
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Switching Technologies Gunther Limited (STGL) has announced a significant move to address its financial challenges by agreeing to sell its entire business undertaking to Canolli Manufacturing Private Limited for INR 4.2 crores. This strategic decision comes in the wake of declining financial performance and mounting losses for the company.
Key Points of the Transaction
- STGL has executed a binding term sheet with Canolli Manufacturing for the sale of its business undertaking on a slump sale basis.
- The transaction is valued at INR 4.2 crores, slightly above the INR 4,18,04,500 valuation provided by an independent valuer.
- The sale includes all assets, properties, intellectual property, business contracts, and identified employees.
- Shareholder approval is required, with an extraordinary general meeting scheduled for October 2025.
Financial Context
STGL's decision to divest its business undertaking comes against a backdrop of deteriorating financial health:
| Financial Metric | Amount (INR) |
|---|---|
| Turnover (FY 2025) | 7.71 crores |
| Net Worth | -12.81 crores |
| Sales | 77.32 million |
| Net Loss | 66.89 million |
| Accumulated Losses | 1,526.19 lakhs |
| Current Liabilities Excess | 724.65 lakhs |
The company's financial situation has become increasingly precarious, with current liabilities exceeding current assets and a completely eroded net worth.
Rationale for the Sale
The board of directors cited several reasons for the divestment:
- Declining sales and increasing losses
- Need to improve liquidity
- Repayment of obligations
- Continuous losses from the business undertaking
Related Party Transaction
It's worth noting that this transaction falls under the category of a related party transaction. Canolli Manufacturing's shareholders, Mr. Joseph Romana and Mr. Joe Perez, have connections to STGL's promoter, Gunther America Inc. However, the company asserts that the deal is being carried out at arm's length.
Looking Ahead
The completion of this transaction is subject to customary conditions, including shareholder and regulatory approvals. STGL expects the deal to be consummated within about three months, pending these approvals and the fulfillment of conditions outlined in the Business Transfer Agreement.
This strategic move by Switching Technologies Gunther Limited represents a significant shift in its operations, aimed at addressing its financial challenges and potentially providing a path forward for the company and its shareholders.
Historical Stock Returns for Switching Technologies Gunther
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -2.81% | -5.44% | -9.66% | -28.61% | -20.50% | +121.67% |
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