KSM Castings Group filed an application for a protective shielding process with the Hildesheim district court on 2 July.
KSM Castings Group has applied for the protective shielding process only for its German production sites in Hildesheim, Wuppertal, Radevormwald and Wernigerode, where the company employs around 1,800 people in total. KSM Castings is one of the leading automotive suppliers of aluminium and magnesium die cast components for chassis, transmissions and engines.
The German automotive industry is particularly affected by the effects of the Corona pandemic, with sharp declines in demand and production. KSM Castings Group is a first prominent victim of this development and intends to restructure and reposition itself as part of the protective shielding process.
“We have recently been on a clear growth path in Germany. Then Corona arrived. We will have to adjust to a changed market after Corona,” says CEO Zhihua Zhu. “That’s why we will now position our company with the possibilities offered by the protective shielding process in such a way that we will again be sustainably competitive even under the new market conditions. Our shareholder supports the restructuring course we have taken and has promised his support.”
The protective shielding process does not affect the automotive supplier’s operating business, says KMS, and the production and delivery of components to automobile manufacturers and OEM partners continue without restrictions.
Protective shield only for German production sites
KSM Castings Group GmbH has around 2,350 employees in Germany and the Czech Republic and generated sales of EUR 360 million in 2019. Only for the German production sites of KSM Castings Group, the protective shielding process was applied for. The ‘Schutzschirmverfahren’ is a special form of insolvency in self-administration, in which the existing management develops a reorganization or restructuring plan. It is only applied if the company has a fundamental prospect of successful restructuring and is not insolvent.
The lawyers Gerrit Hölzle and Thorsten Bieg from Görg law firm were appointed as Chief Insolvency Officers (CIO) to the management of KSM Castings. The two restructuring and insolvency specialists have extensive experience in self-administration proceedings. Attorney Rainer Eckert was appointed as the preliminary administrator of the proceedings by the Hildesheim District Court.
The KSM management will develop a concrete restructuring plan together with the restructuring and insolvency experts in the next few weeks. The extent to which employees will be laid off at the German production sites has not yet been determined, says the company.