Decoupling the subsidiary as the core of restructuring consulting
The starting position
The metal processor, which consists of two companies, generates consolidated annual sales of around 50 million euros with 250 employees. While the parent company in Upper Swabia specializes in complex machine cladding or control cabinets, the subsidiary based in the Rhine region is one of the technology leaders in the field of special cabins for maritime and mining applications. Rooted in history, the group of owner-managed companies traces its origins back to 1846.
The subsidiary's high dependence on one main customer has led to an existential earnings crisis. In addition, operational challenges have arisen due to an unprofitable expansion of the product portfolio and the associated complexity.
The parent company is fundamentally efficient, but a temporary drop in demand and a lack of sales efforts are leading to underutilization. In addition, the subsidiary’s predicament is straining management and financial resources. The cross-guarantee system of the two companies, which is being formed during the group's refinancing, makes finding a solution even more difficult.
The procedure
bachert&partner supports the operative business at both company locations while preparing a reorganization concept according to IDW S 6. The first step is to stabilize sales at the subsidiary in order to minimize spillover effects, e.g. on common customers. The restructuring plan entails the decoupling of the special cab manufacturer and the recovery of the parent company.
In Upper Swabia, the focus is on revenue generation and selective optimization measures. The long-term retention of top performers is paramount, alongside executing a financial unbundling concept. Implementation entails a transfer of entrepreneurial management, the insolvency of a group company and the development of social plans with a reconciliation of interests.
The measures at a glance
Development of a financial unbundling concept and negotiation with the financing partners
Decoupling of the loss-making subsidiary in the context of a planned insolvency
Deferral of special payments
Development and implementation of a sales-up program
Adjustment of administrative structures
Setting up a working capital management system
Introduction of a new target system to actively retain top performers