Restructuring an international automotive supplier

Situation

American Glass Products Group (AGP) was a high-tech specialty glass designer/manufacturer with around 100 years of glazing heritage and a large portfolio of around 650 customers globally, headquarters in Ghent, Belgium, with local service offerings in 20+ countries (Americas and Europe), 4,600 employees, annual revenue €500m.

Soliver N.V. (Soliver), a Belgian subsidiary of AGP acquired in 2018, was a European automotive glazing manufacturer with over 65 years of experience offering high-quality tempered and laminated glazing for high-end automobiles. The business was headquartered in Roeselare, Belgium, with 1,200 employees, and an annual revenue of €150m.

From 2014, AGP underwent a period of rapid growth in the Americas. In 2020, AGP was impacted by COVID-19 shutdowns and the effects of supply chain disruptions resulting from the war in Ukraine. OEMs and lenders (total debt: approximately $730m) had already provided support through Accommodation and Forbearance Agreements, especially in the Americas.

Key challenges at the start of the engagement:

Structural: A counterintuitive corporate legal structure; numerous internal entanglements and dependencies (legal/operational/commercial/financial) with contingent liabilities

Financial: Liquidity constraints, upcoming maturities, need for further Accommodation Agreements (with OEMs) and Forbearance Agreement (with lenders)

Operational: Products (low prices, high costs, scrap rates, structural cost disadvantages), production (delays in ramp-up of programs (SOPs), over-/under-capacities)

Our approach

Phase 1: CRO pre-phase

We initially prepared a Chief Restructuring Officer (CRO) engagement to create transparency on structural, financial, and operational issues and to strengthen management (especially in concluding restructuring agreements). Due to a non-viable business plan and a missing target picture/turnaround, this engagement had to be declined. However, against the background that a major OEM in America had signalled its withdrawal, we were engaged to secure Soliver as the core of European business activities.

Phase 2: Options analysis and conceptual solution

We conducted a cross-impact analysis to gain a clear understanding of the consequences for the European business after a collapse in America, with inevitable local insolvency proceedings.

To preserve the European production sites and secure delivery for the European OEMs, we conducted an options analysis and developed a conceptual solution to secure Soliver, considering all relevant out-of-court restructuring instruments and court-supervised (insolvency) proceedings:

Option 1: Solvent liquidation (with parallel M&A process)
Option 2: Insolvency proceedings with stakeholder support
Option 3: Insolvency proceedings without stakeholder support

As a result of a comparative quantitative and qualitative valuation, option 2 (in the form of a Transfer of Business under judicial authority, according to Belgian law) was deemed preferable. It offered debtor-in-possession proceedings, a moratorium and carried a realistic chance of maintaining business operations and preserving a large number of jobs after a court-supervised M&A auction process aiming for an asset deal under privileged conditions.

We also planned the sequencing of further procedures for other AGP group companies to ringfence Soliver.

Phase 3: Negotiation and preparation

After general alignment on the conceptual solution with management, European OEMs, and senior lenders, we moderated full timely agreements between these major stakeholders to fund the proceedings and to release loan collaterals, extend standstills, and accept partial waiver of claims against compensation.

We also prepared the carve-out of Soliver for the potential acquisition of its assets.

Phase 4: Implementation and monitoring

Subsequently, we supported the court filing, the M&A process, and monitored production, deliveries and compliance with budget.

Results

AlixPartners played a pivotal role in stabilizing and restructuring AGP’s European operations. The team designed and implemented a comprehensive strategy to ringfence these operations, based on a complex, multi-jurisdictional options analysis for Soliver. This included developing a concept for sequencing formal procedures across other AGP group companies to ensure an orderly disentanglement of Soliver.

In addition, AlixPartners supported the preparation and execution of a Belgian Transfer of Business under Judicial Authority – a previously untested formal proceeding in the restructuring space – aimed at preserving jobs and continuing Soliver’s operations under new ownership. The firm also facilitated negotiations between Soliver and European OEMs to secure €160 million in funding for formal proceedings, ultimately delivering €21 million in budget savings through rigorous cash tracking and cost management.

Balancing diverging interests, AlixPartners facilitated consensus between senior lenders and European OEMs, securing lender approval for proceedings against a €70 million compensation payment. The team further enabled the carve-out of Soliver and assisted in preparing potential asset deals, while managing process-intensive wind-downs and sales of various remaining AGP companies.

Despite challenges in the M&A process, where the winning bidder ultimately failed to demonstrate timely acquisition financing, AlixPartners ensured continuity by orchestrating a nine-month controlled out-production and transition phase. This phase allowed employees to continue working on a temporary basis and enabled European OEMs to negotiate with potential buyers and establish alternative supply relationships.