BERLIN -- German supplier Leoni is in advanced negotiations with its financial creditors and Austrian entrepreneur Stefan Pierer over a restructuring concept, the company said in a statement.
Pierer aims to save the troubled wiring system specialist by taking a majority share in the company.
Pierer currently holds about 20 percent of the supplier.
Under the proposed deal, Pierer would contribute 150 million euros ($163 million) by way of a cash capital increase in return for the issue of new shares in Leoni. Pierer will also take over about 700 million euros in bank debt.
This plan aims to substantially reduce the company's debt and provide it with fresh liquidity and is the only remaining restructuring solution available to Leoni, its management board said. The restructuring concept will secure Leoni’s finances until the end of 2026 based on the current corporate planning.
As a result of the deal, Pierer will be the sole shareholder of Leoni and the company will no longer list its shares.
Creditors have already approved the restructuring under the German Corporate Stabilization and Restructuring Act, which bypasses the need for a majority approval at the company’s next annual general meeting, which is seen as unlikely.
Necessary approval from the German states of North Rhine-Westphalia, Lower Saxony, Bavaria and the federal government itself, is still outstanding, however.
