Automotive
Automotive
The automotive sector, from retail showrooms to original equipment manufacturers and their considerable supply chain, has faced major challenges with both business and private demand for new vehicles waning. Many businesses in this sector have adopted a number of measures to combat challenging financial conditions including shortened working weeks and squeezing the margins of other companies within their own supply chain. Although intervention has been welcome, such measures are short term in nature and have failed to address the fundamental issues within the sector.
Our understanding of the unique value locked within the automotive sector allows us to implement restructuring strategies that can, where possible, free up cash, improve performance and release assets before problems become insurmountable.
We take a holistic approach to working within this sector and draw upon a complete toolkit of expertise to enhance the outcome of our clients. Our restructuring experts work alongside a range of operational experts within the automotive sector, who have previously occupied senior positions within the sector.
Effective Solutions
When instructed to work alongside a distressed business, we will work very closely with the current management team, or, if appropriate, the relevant investor in order to assess the situation, and produce a number of viable options to get the business back on track.
Typically our priority is to stabilise short-term cash flow and then produce a coherent restructuring and turnaround solution which addresses the long-term needs of the business, and puts the business back on the road to not only financial recovery, but also growth.
Finance Arrangements
Businesses within the automotive sector often have to call upon their credit insurers during troubled times and our relationships with underwriters, brokers and claims professionals in this market is second to none, ensuring they obtain the maximum value owed under any given policy.
By their very nature, motor trade and automotive companies may have limited assets other than their premises, with vehicles, machinery and equipment very often leased by finance companies. Our financial consulting services include strategic planning and valuation advice which can help realise the value of any property assets to enable ongoing business success.
Product Recalls
The words ‘product recall’ are many manufacturers’ worst nightmare, and such recalls are becoming more common as society becomes more litigious. Recalls can severely affect the financial performance of the business and, therefore, require a coherent strategy to minimise the impact on brand equity. We work with companies and their media advisers to ensure everyone who needs to be is fully briefed and able to convey approved messages to the press.
Investigation and Intelligence
The automotive sector is incredibly competitive and research is proving a key way of differentiating a manufacturer’s offerings. Previously, we have been instructed to assist manufacturers in suspected cases of ‘industrial espionage’ – where vital data has been leaked to a competitor. In these instances we have successfully traced the sources of leaks and made recommendations to prevent such incidents in future. This skill is supplemented by e-discovery expertise, which is playing an increasing role in instances of fraud.
Our advice includes:
- Restructuring and business development strategies
- Outsourcing analysis
- Strategic M&A review and options
- Property and asset valuations
- OEM negotiation
- Lender and creditor liaison
- Purchaser and investor introductions
- Corporate simplification
- Performance enhancement
- Data and intelligence leakage and tracing
Related Case Studies
Automotive
SPARKS Group
The SPARKS Group is an IT and software service provider for customers in the automotive sector. It has been offering high-quality software and consulting solutions for leading automakers such as Porsche, Audi and VW since it was established in 2012. Given the difficult market environment, the SPARKS Group initiated self-administration proceedings to equip itself for the future. Several companies in the SPARKS Group were affected by the filing. Mr Ivo-Meinert Willrodt and Mr Hans-Christian Kaellner, restructuring experts at PLUTA Rechtsanwalts GmbH, supported the repositioning as general agents.
The group remained fully operational during the proceedings. Customers were able to rely on the familiar quality and reliability of its services, and key business relationships were further deepened during the restructuring. The focus lay on preparing a comprehensive restructuring concept and reviewing the various possible solutions. A structured M&A process was also launched. In less than three months after the company filed, the PLUTA team found an investor. Following the completion of a bidding process, the purchase by way of an asset deal was concluded.
ACONEXT SPARKS GmbH acquired three companies and around 60 employees by way of an asset deal. SPARKS BW GmbH, SPARKS IN GmbH and SPARKS Solutions GmbH were included in the transaction. Both sites in Ingolstadt (Bavaria) and Heimsheim (Baden-Württemberg) have been preserved. The investor ACONEXT was established in 2014. It is a mid-sized technology consultancy with high-profile customers, specifically premium automakers, system suppliers and companies in the aviation industry. ACONEXT is continuing to pursue its expansion strategy with this acquisition and will leverage synergies to further expand its market position with key customers.
Automotive
Kurt Erxleben
Kurt Erxleben GmbH & Co. KG is a supplier of formed parts for the automotive industry. The company from Wildeshausen in Lower Saxony has over 50 years of experience and has focused on mechanical sheet metal processing since 1972. It has customers in the automotive and agricultural engineering sectors as well as other sheet metal working industries. The company processes steel, aluminium, stainless steel and spring steel. Supplying formed parts presented the company with major challenges, as cost increases could not be passed on directly to customers. Kurt Erxleben responded by entering self-administration restructuring proceedings. Dr Christian Kaufmann from PLUTA Rechtsanwalts GmbH supported the restructuring as general agent.
After filing its application in early 2024, Kurt Erxleben continued operating without restriction. A restructuring team from PLUTA Rechtsanwalts GmbH supported the company during the entire proceedings and implemented the necessary measures. A structured M&A process was also conducted. After more than a year of maintaining operations under self-administration proceedings and despite the challenging market environment, an investor willing to take over the business and keep on all employees was found.
The self-administration proceedings offered an opportunity to stabilise the company’s financial position and strengthen its competitiveness at the same time. Renowned company Max Valier Holding came on board as a strategic investor. The group specialises in the acquisition and development of medium-sized engineering, production and service companies in the commercial and industrial sectors. The takeover by way of an asset deal saved the jobs of the approximately 160 employees and 100 agency workers. The solution ensured the survival of the brand and the business and also represents the best possible outcome from the creditors’ perspective.
Automotive
Metallgießerei Scheeff
The automotive supplier Scheeff, based in the German federal state of Baden-Württemberg, had to file for insolvency some years ago. The PLUTA insolvency administration team kept the business going for almost one year and implemented important restructuring measures. Some 1.5 million euros had to be invested during the insolvency proceedings to meet official and other requirements. Following intensive negotiations, a solution was found for the company. A well-known group of companies from the region with over 1,000 employees acquired the foundry and kept on more than 100 of its employees. Creditors received a recovery rate of more than 20%.
Automotive
GfI Gesellschaft für technische Ingenieurleistungen mbH
GfI employed many highly qualified people, but sales still declined, as its focus on customers in the automotive sector proved to be a problem. In order to best position itself for other industrial sectors as well, GfI filed an application for debtor-in-possession insolvency proceedings. Management remained in charge and guided the company through the crisis itself. A PLUTA expert was appointed as insolvency monitor by the court to protect the interests of the creditors. The company was restructured during the proceedings and was sold to and integrated into an engineering service provider group with international operations.
Our Other Industry Experience