30.04.2024
International
With the protective shield procedure, Franken Guss GmbH & Co. KG is actively taking a step towards the long-term positive development of the company. To this end, Franken Guss GmbH & Co. KG will draw up a restructuring plan over the next three months in close consultation with stakeholders and advisors. This will contain specific measures for reorganising the business. The business operations of Franken Guss GmbH & Co. KG will continue in full during the entire restructuring process. All services will be provided unchanged. The plan is to complete the reorganisation in a sustainable manner within a few months.
The protective shield is a proven restructuring instrument under German reorganisation law. In a protective shield procedure, entrepreneurial responsibility remains in the hands of the management (self-administration). This is only possible in cases where companies take action themselves at an early stage and there is sufficient room for manoeuvre to find a solution. For example, the planned restructuring and reorganisation measures were checked by an independent auditor prior to filing the application. This external auditor has certified to the court that no obstacles to reorganisation are seen.
‘Franken Guss will use the opportunity of the restructuring proceedings to strengthen its market position,’ explains Dr Sebastian Braun (partner at RKGB Rechtsanwälte and recognised expert in insolvency law). The company is being supported by the AMBG (Adiutor Management- und Beratungsgesellschaft mbH) team, which also specialises in reorganisation and restructuring proceedings.
In protective shield proceedings, a trustee is appointed. This monitors the reorganisation in the interests of the creditors. Rüdiger Weiß from the reorganisation law firm WallnerWeiß was appointed as the provisional administrator.
In the past years of successive crises, it has not been possible to implement all cost increases beyond materials and energy at the right level and without any significant time lag, and thus to achieve an almost sufficient recovery of the company's costs through prices. Valuation corrections required in the short term undermined the confidence of the financial markets in the company and dynamised the crisis. To make matters worse, the market for electromobility collapsed by around 35% when the purchase premiums were cancelled and a recovery is not in sight. Franken Guss has invested a lot of money in the foundry and machining for this market in particular in recent years.
The protective shield proceedings are intended to eliminate these problems in the long term and restore the operational business fundamentals through the prompt implementation of all necessary financial and performance-related changes.