The German sub-supplier Webasto, which supplies most of the car industry, is in an acute debt crisis with a debt of more than DKK 7.5 billion.
The German sub-supplier Webasto is in an acute crisis. The company, which produces car parts such as roof and heating systems, has a debt of 7.5 billion kroner, equivalent to 1 billion euros, which must be refinanced.
The crisis at the headquarters in the city of Stockdorf is due to a slowdown in the automotive industry, which has hit Webasto hard. Boosted has mentioned the Germans' financial problems too. Read more about it here .
Webasto and the company's lenders, including BayernLB and UniCredit SpA, are in the process of appointing a restructuring manager to oversee negotiations for new loans.
The company has also hired Rothschild & Co. to advise on the debt problems and possible mergers or takeovers.
Bloomberg writes that.
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The negotiations come a few months after Webasto entered into an agreement with the banks to adjust the terms of its loans after exceeding the loan terms. However, the worse-than-expected economic performance has prompted new negotiations with the lenders.
Webasto's situation reflects the challenges facing the automotive industry. The transition to electric cars has been slower than expected. And the rising cost of living puts pressure on consumers, who in turn stay away from the new cars to a greater extent.
Ford Motor Co. recently announced plans to cut 4,000 jobs in Europe, and Volkswagen AG is considering closing several plants in Germany. In fact, the brand's director calls it an outright necessity. Just as layoffs can come into question.
Webasto has also experienced increased competition from Chinese companies, which has led to declining sales in China in 2023. The high debt, which was partly taken out to finance an expansion of the business, has now turned into a significant break.
Webasto is advised by the law firm Milbank LLP. While Freshfields Bruckhaus Deringer LLP advises the banks. At the end of 2023, Webasto had loans for more than DKK 7.8 billion. One of the loans alone was DKK 6 billion.
The company has already started to slim down. In February, Webasto sold the majority of a charging stand company. And just one month later, it was announced that mass redundancies are part of the further considerations.
