How specialized interim expertise enabled new local financing for a mid-sized company
A mid-sized engineering company had delivered solid results for many years. However, declining innovation momentum and cyclical weakness in key markets increasingly put pressure on the business. Ultimately, the economic difficulties led to self-administered insolvency proceedings.
During the process, an internationally listed corporate group was brought in as a strategic investor with the support of all key stakeholders, including the financing banks. This initially secured the continuation of the business. New business activities were financed by the investor through equity funds.
In addition, a high-revenue but low-margin specialized division was sold to a strategic competitor. The proceeds were primarily used to cover procedural costs and parts of existing legacy liabilities.
At the same time, structural costs were adjusted under the leadership of the CRO. The remaining higher-margin business units were strengthened and their innovation capabilities further developed. Operating performance improved significantly. An important lever was also the integration of the German company into the group’s international division of labor.
Operational recovery, but gaps in the finance organization
The restructuring also had consequences for the internal organization. As part of the necessary cost adjustments, the commercial and finance functions had been significantly reduced. In addition, several key performers left the company at the height of the crisis.
Experienced leadership was particularly missing in accounting and treasury. The remaining structures were mainly focused on day-to-day group reporting, IFRS reporting requirements and operational cash management.
As a result, the company lacked exactly the combination of capacity, experience and specialist expertise required to prepare and manage a demanding external financing process with German banks.
New financing requirements from the group
While the business in Germany stabilized, other parts of the international group underperformed. As a result, pressure increased at group level to replace equity tied up in Germany with local debt financing at a commercially reasonable level.
At the same time, the group’s core banks indicated that local financing needs should preferably be covered locally. The CRO therefore approached German financial institutions. However, reservations remained due to the previous insolvency.
There was another concern as well: financing partners wanted to avoid a situation in which operational receivables would effectively be used for long-term group financing.
It also became clear that the existing documentation, consisting of HGB financial statements, external tax accounting and IFRS planning figures, did not provide the level of transparency banks expected for a lending decision.
A rare, complex and time-critical profile
The CRO therefore approached HANSE Interim Management with a demanding requirement profile:
- Extensive experience as a commercial leader in an international group environment
- Strong financial reporting expertise across HGB and IFRS
- Proven skills in integrated planning covering P&L, balance sheet, cash flow and liquidity
- Experience in approaching financing partners
- Strong negotiation skills in English
HANSE Interim Management quickly presented two highly qualified candidates who clearly stood out during the selection process. One of them was immediately appointed.
Three key priorities
At the start of the assignment, three core priorities were defined:
- The IFRS group planning needed to be translated into a bankable HGB structure.
- Financing had to be clearly ring-fenced to the German operations.
- The strategic repositioning toward profitable technology segments needed to be communicated convincingly.
Execution
The interim managers developed tailored solutions for these requirements.
A controlling-focused interim manager created a transparent bridge between IFRS planning and HGB reporting structures. This provided potential lenders with a reliable and understandable decision basis.
Together with the CRO, a binding agreement was also reached with the group finance management on market-based intercompany terms. In addition, a dedicated reporting structure was established to support a robust ring-fencing concept.
A second operationally focused interim manager introduced SMART reporting that made measures, responsibilities, timelines and financial impact fully transparent.
The result
With this overall package, HANSE Interim Management addressed its network across the German banking market.
Following demanding negotiations, two financing partners were secured who jointly implemented a local financing solution within a shared collateral structure.
For a further two years, quarterly plan-versus-actual reviews were conducted based on current results and updated planning assumptions.
What this case shows
When standard financing documents are not enough, more than numbers are required. Structure, credibility, the ability to translate between different systems and experienced personalities who build trust become decisive.
That is exactly where interim management creates value.
Best regards
Your HANSE Interim Management
Andreas Lau
