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Strategic & Operational Strength: Comprehensive Solutions for an Automotive Supplier

Lacking financial transparency and sound operational processes, an automotive supplier engaged FTI-Andersch to identify the root causes behind the challenges it faced and enact comprehensive solutions.

Our Impact

As a result of FTI-Andersch’s expert restructuring opinion, the supplier received EUR50 million in fresh capital from lenders during the lockdown and its aftermath, helping to continue its operations.

FTI-Andersch’s work supported the case for more robust resourcing of the company’s finance department.
The team provided process stability and financial transparency, helping the company’s shareholders start exiting their investment. The engagement is still ongoing, with FTI-Andersch providing support in various areas including management of cash and working capital.

Situation

Germany’s first national pandemic lockdown hit a Tier 1 automotive supplier hard. Many original equipment manufacturers who had maintained optimistic forecasts were forced to cancel their call-off contracts at the last minute, rendering business operations uncertain and effects on liquidity difficult to predict. Deficits in financial controls exacerbated these issues. To avoid a liquidity shortage, the supplier’s shareholders and lenders agreed to a debt equity swap and bridge financing, with the precondition that the supplier would secure a restructuring opinion. In May 2020, the client engaged FTI-Andersch, the consulting unit of FTI Consulting in Germany that specialises in restructuring, business transformation and transactions, for expert assistance following prior positive experiences with the firm.

Our Role

FTI-Andersch prepared a restructuring opinion to facilitate the provision of fresh capital and retain relevant trade credit insurers.

The team advised the CFO on strategic and operational improvements as well as relevant corporate functions by: 1) offering support on transparency for foreign production sites, 2) helping develop integrated financial controlling tools and processes and 3) managing liquidity and working capital.