BIP, Luxempart-backed Arwe in self-administration

Harriet Matthews
20 March 2020

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Munich-based automotive services firm Arwe, a portfolio company of Luxembourg-headquartered sponsors BIP Investment Partners and Luxempart, has filed for insolvency under self-administration proceedings.

Arwe's CEO, Ulrich Feißt, cited the uncertainty caused by the coronavirus outbreak and its potential impact on future company financing as the reason for initiating the proceedings.

Paul Abel, partner at law firm Anchor Rechtsanwälte, has been appointed as provisional trustee by the court and will oversee the process for the company's creditors, while its management remains in place.

Consultancy firm Restrukturierungsgruppe RSP, led by Stefan Weniger, and a team from law firm Heuking Kühn Lüer Wojtek led by Stefan Proske are also advising the company.

Employee wages and salaries are guaranteed until April 2020 under German bankruptcy law, according to German press reports.

The proceedings relate to company subsidiaries Arwe Holding, Arwe Automotive Service, Arwe CarRental Service and Arwe Mobility Service. No filings have been made for Car24 or the company's European subsidiaries.

Arwe provides professional vehicle preparation, maintenance and logistics services. It has around 4,000 employees and operates in 300 locations in Europe. Arwe's customer base includes car manufacturers, dealers and leasing companies, as well as car-sharing businesses.

In July 2005, Afinum wholly acquired Arwe, investing via its third and fourth vehicles. Landesbank Rheinland Pfalz provided a senior loan to back the acquisition. Triginta Capital acquired four Afinum portfolio companies in January 2007, including Arwe.

BIP and Luxempart bought a majority stake in Arwe in February 2017. The company reported turnover of €143m in 2016 and €151.2m in 2017. It had a headcount of approximately 5,000 at the time of the acquisition. BIP invested via BIP Fund, which targets companies with enterprise values of €30-150m in German- and French-speaking European countries.

Many travel and logistics-focused companies are struggling following a sudden drop in revenues as European borders close and potential customers travel less in the wake of government advice and restrictions to limit the spread of coronavirus.

Germany-based car manufacturer Volkswagen halted production for two weeks from the evening of Thursday 19 March in response to the outbreak, citing supply chain concerns and the health of its employees.

Even prior to the uncertainty caused by Covid-19, the automotive sector was facing difficulties due to technological changes such as the move away from combustion engines, as well as changing customer behaviour, compounded by supply chain issues brought about by the US-China trade war.

In February 2020, Bain-backed tyre retail group Reiff Riefen filed for insolvency and was subsequently put up for sale, as reported by Unquote. Ardian's Weber Automotive also filed for insolvency in July 2019 after encountering financial difficulties (as reported), marking last year's only exit of a PE backer from an automotive company.