Addressing Leadership Changes and Moving Beyond Recent News
Anthony Davies
Member
"Landshut, March 28, 2024 – Endor AG is in negotiations with lending banks regarding a standstill agreement until June 30, 2024 about the existing loans. The standstill agreement is subject to conditions. The Endor Supervisory Board will discuss these conditions today and, if necessary, pass a resolution."
This development could signal a potential turning point; the information provided sheds light on the company's current financial standing and its future plans.
Allegedly, the standstill agreement allows the company to recalibrate its financial strategy without the looming threat of defaulting on loans by temporarily pausing loan repayments. This development sends mixed messages to customers, investors, and employees alike. On the positive side, it demonstrates the company's proactive efforts to address its financial challenges, potentially paving the way for future stability and growth.
Looking ahead to June, when the agreement is up for review, its successful implementation could result in additional cash flow—funds that would have been directed towards servicing debt. This potential increase in liquidity could, in theory, enhance Fanatec's ability to either process refunds to customers or reinvest in the resources necessary to catch up on outstanding orders.
Comments
Thats already old news and not an update at all, its already overhauled by the dismissal of the CEO on the same day, discussed in several threads here in the forum for the last 3 days.
Hi Maurice,
Thank you for pointing that out. My intention was to offer context that might still be relevant to some, but I see now that the conversation has moved forward. Let's continue sharing and discussing the most up-to-date information to ensure we're well-informed.
Maurice,
Based on your comment, I've updated the title to reflect better the current discussions and the recent developments regarding the leadership changes. I apologise for any oversight in my post.
The real news, which mostly went unnoticed, is that the banks FORCED Fanatec to fire the CEO and hire a CRO.
CEO and CRO are two different acronyms, because their roles are different.
This is an insolvency proceedings in self-administration. Unlike in standard insolvency proceedings, companies in self-administration do not have an insolvency administrator. The management itself reorganizes the company – often advised by a reorganization expert acting as chief restructuring officer (CRO), who provides advice and operational support to them during preparation and implementation of the reorganisation.
This is in fact the step immediately preceding the bankruptcy procedure due to insolvency, and is imposed and/or granted by banks when they see the possibility that restructuring is possible and more profitable than bankruptcy.
Fired probaply not correct word, more like step back from current position. Thing is Thomas still is at fanatec but with different position.
From info you can find online, it was a formal dismissal from the supervisory board on behalf of lending banks, not a voluntarily step back.
I understand that Thomas will maintain a 50% share in Fanatec, allowing him to continue influencing the company's direction. This arrangement seems to stem from the banks' conditions for extending their credit to Endor AG, essentially mandating a turnaround in operations. This demand likely led to a stipulation for a change in leadership
In short, Thomas has been contractually obligated to step down, at least in an official capacity.
There is no insolvency and insolvency is not unavoidable or imminent.
You are right that the banks requested the removal of TJ from the CEO role, but the appointment of a CRO should not be read as confirmation that Endor insolvency is imminent or unavoidable - it's actually quite the opposite.
The appointment of the CRO aims to make either of these possibilities less likely. The appointment does indicate the strength of concern that Fanatec was heading in that direction and a lack of confidence by the lenders in the previously existing Board - TJ in particular to manage the company.
The CRO is appointed to lead the business through restructuring so that it can meet its obligations to these lenders, manage the company out of crisis and ultimately stay in business - NOT as a step towards bankruptcy.
Whether the CRO manages this or not remains to be seen, but as anyone who has been paying attention could see - this company has been floundering for a while and this change has been a long time coming. The only bad news here is that this change wasn't made a long time ago.
I believe that due to a language barrier we are confusing bankruptcy and insolvency. I'm not English, so I guess it's my fault. Insolvency is when you don't pay your debts.
According to a recent German law, creditors (banks or suppliers) can enter the board of companies that no longer have the ability to pay their debt, and impose a restructuring.
http://www.rivistaodc.eu/Article/Archive/index_html?ida=171&idn=25&idi=-1&idu=-1
https://www.schultze-braun.de/en/services/restructuring/self-administration
I understand - but this is not what is happening here. The CRO was not appointed by the creditors, but by Endor supervisory Board.
Endor (at this stage anyway) is not in administration, insolvent or bankrupt. They have agreed extension on existing lending with their creditors which came with certain non-negotiable terms - one of which was removal of TJ as CEO.
BTW - Insolvency is not when you don't pay your debts - it's when you are no longer able to pay your debts - it's an important difference.
Yes you are right.
However, I am trying to understand whether the restructuring was really decided by Fanatec, or imposed by the banks. It doesn't seem clear from the press release. I guess we'll know on June 30th.
IMO, the supervisory board's decision to appoint a CRO reflects a proactive and strategic approach to restructuring, aimed not just at survival but at revitalising Fanatec's operations and financial health.The approach emphasises a vital point. Fanatec is focused on stabilising its financial situation by actively addressing its challenges rather than being on the brink of insolvency.
The leadership change, likely initiated under the lenders' conditions, is another strategic pivot, showcasing a readiness to make tough decisions for the company's future benefit. Let's hope that Fanatec's actions extend beyond mere debt management and form part of a broader strategy to establish a more stable and solid foundation for the company.
It's pretty simple. Because CEO is being replaced, the only reason to hire CRO and new CEO at the same time was a requirement for new money flow (by the banks). In case of internal decision, they would have kept old CEO and put CRO over him to help him cleanup the current mess.