Sun Capital's Flabeg Germany files for insolvency

Volker Böhm, partner at Schulze & Braun, has been appointed as provisional insolvency administrator. Alfred Hagenbusch of Wellensiek is providing legal advice on restructuring.

Sun European Partners wholly acquired Flabeg in September 2015. At the time, the company had 1,500 employees globally and had filed for insolvency in 2013, which brought about the sale of its automotive glass division.

The GP deployed equity from its sixth fund, which held a final close in July 2014 on $2.1bn.

In November 2016, the company undertook a refinancing advised by Herter & Co. Financing was provided via a term loan of €25m from Cordet Capital Partners and a revolving credit facility from Unicredit, according to Unquote sister publication Debtwire.

In 2018, the company obtained financing via a loan of €45m to support its growth, according to Debtwire; this was also provided by Unicredit and Cordet.

The insolvency filing related to Flabeg Deutschland and Flabeg Automotive Holding. Flabeg was established in 1882 and has 250 employees at its site in Furth im Wald, Germany, with 26 additional staff in Nuremberg. The company introduced Kurzarbeit (a government-backed short-term work scheme) in recent weeks and the salaries of its employees are covered by an insolvency package for three months. It has 1,300 employees globally and a turnover of €85m.

A statement from Schulze & Braun noted that the company's automotive products will also be necessary for the production of electric vehicles in future.

A spokesperson for Sun European Partners told Unquote: "In 2015, an affiliate of Sun European Partners acquired the automotive business of Flabeg (Flabeg Automotive) following the insolvency of the solar business of the wider Flabeg group. Since then, Sun European Partners has supported Flabeg Automotive's management team to improve operations through a number of operational and strategic initiatives, including the entry into new growth areas in the automotive interior space.

The spokesperson said: "Unfortunately, the market environment in the automotive industry deteriorated in the second half of 2019 and has been further aggravated as a result of the Covid-19 pandemic, resulting in a complete lockdown of the industry with OEMs temporarily shutting down sites in all regions.

"Sun European Partners has assisted Flabeg management in evaluating different options to support the business. Talks with the lenders and management were held in recent weeks to find suitable solutions to support the business financially. However, due to the unforeseen, accelerating and exceptional impact of Covid-19, it was not possible to find a solution in the short amount of time.

"Sun European Partners regrets that Flabeg Automotive now has to go through insolvency proceedings."

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