Wellemöbel GmbH has successfully completed an equity capital increase in the course of insolvency proceedings under self-administration.
Wellemöbel, based in Bad Lippspringe (East Westphalia) with another location in Alsfeld, manufactures bedroom, youth and baby furniture and is one of the market leaders in Germany. The origins of the company go back to the year 1896.
At the end of November 2014, Wellemöbel filed an application for initiation of preliminary insolvency proceedings and applied for self-administration. The self-administration enabled Wellemöbel a restructuring under insolvency protection based on changes to the German Insolvency Code introduced in 2012. It is not an insolvency proceeding in the classic sense but a restructuring proceeding with the objective to ensure the continuation of the company.
At the end of April 2015, the financing required for the restructuring plan has already been secured by a capital increase. The renowned producer of free standing cabinets will invest over US$3 million in the modernization and renovation of machinery. In addition, management reached an agreement with the works council and the labor union about a socially responsible headcount reduction of 260 employees and the closure of the Detmold site. About 600 jobs are maintained.
At the end of June, the creditors almost unanimously approved the insolvency plan which regulates the debt relief for the company. The suppliers, taking into account preferential rights (retention of title), achieved a satisfaction quota of up to 30%. On 31 August, the insolvency proceedings were formally repealed.
Oaklins' team in Germany served as the exclusive financial advisor to Wellemöbel in the process of raising additional equity capital.
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