They combine experience, common sense, integrity, ideas, perseverance and the ability to inspire, motivate and work well with other people.
Carlos Gila, Oaktree Capital Management
Areas of operation:
BM&T was appointed CRO of the 85% owned German subsidiary of a US manufacturer of gears in workout and in negotiations with a potential Private Equity investor. The subsidiary was 15% owned by Sumitomo. The German company, a Tier 2 supplier to Hungarian based Denso and itself located in the East of Germany had been equipped with Saxony Government publicly funded new machinery for pressing and finishing gears from powdered metal. The loans were partially guaranteed by the parent company. The company was experiencing serious quality problems and high levels of returns leading to losses and intense customer dissatisfaction. The potential Private Equity buyer did not want to purchase the German company and proposed a German insolvency, but this would have created contractual issues with Sumitomo and claims against the loans from the Saxony Government.
BM&T resolved the customer issues by introducing a technical expert to reduce defects to acceptable levels, restored customer confidence and brought the company to profitability thus allowing the sale of the US parent to proceed. The new owner subsequently sold its 85% holding in the German company to Sumitomo.
Notes, insights and reflections from Matthew, one of our directors and turnaround experts, as he works with companies during Lockdown.