Restructuring in the automotive industry – case study

By Sven Dierking and Thorsten Hunsalzer, Gehrke Econ Group

The automotive industry is currently one of the crisis industries in focus. One reason for this is the transformation through e-mobility, autonomous driving, digitalization and market pressure, which means extraordinary investments. On the other hand, the industry is struggling with slumps and market shifts due to the Corona crisis, the repayment obligations from the Corona subsidies, supply chain problems and especially the chip shortage, as well as trade restrictions and high energy and transport costs.

Companies are advised to install a crisis early warning system and a resilient plan for the future now. In a crisis, the following strategic options are available:

  • Strategic Financing,
  • Partnerships/Joint Ventures,
  • Transformation/Restructuring,
  • M&A/Consolidation (total or partial sale) and
  • Liquidation/Insolvency.

Restructuring cases in the automotive industry are typically complex international. This also applies to this typical case: A German automotive supplier slipped into crisis and filed for insolvency. Apparently because insolvencies are rare in China due to state-owned operations and financing, the Chinese shareholder and landlord was surprised by the harshness of German insolvency law. However, for the company and the other stakeholders such as the employees, customers and suppliers, the insolvency proceedings turned out to be a great opportunity. The company's assets were taken over in an asset deal. The purchase price was used to satisfy the creditors. Furthermore, the buyer did not have to assume any liabilities. The Chinese landlord concluded a lease agreement with the buyer. The financing was completely restructured. The purchase price was kept very low through a machine lease. The insolvency finally solved the crisis in a legally secure and successful manner. The company now continues to operate with fresh money and an investor. During the entire process, the supply chain was secured.


Sven Dierking

Sven Dierking

GGI member firm
Gehrke Econ Group
Auditing & Accounting, Tax, Law Firm Services, Advisory, Corporate Finance
Hanover, Germany
T: +49 511 700 50 451
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W: gehrke-econ.de
Thorsten Hunsalzer

Thorsten Hunsalzer

GGI member firm
Gehrke Econ Group
Auditing & Accounting, Tax, Law Firm Services, Advisory, Corporate Finance
Hanover, Germany
T: +49 511 700 50 451
E: This email address is being protected from spambots. You need JavaScript enabled to view it.
W: gehrke-econ.de


Published: GGI Insider, No. 118, March 2022 l Photo: OrthsMedien - stock.adobe.com

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