Strategic & Operational Strength: Comprehensive Solutions for an Automotive Supplier
October 25, 2023
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.
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.
- 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.
- FTI-Andersch supported efforts around communications and reporting to investment funds with a stake in the company.