The beleaguered automotive supplier Leoni AG intended to sell its Automotive Cable Solutions Business Group to Thailand’s Stark Corp. The sale would have brought the ailing company millions of €400. That will probably not happen now: the buyer has refused to close the sale at short notice.
According to Nuremberg, Germany-based Leoni AG, Stark Group has demanded “unexpectedly very far-reaching changes to the purchase agreement.” “Despite Leoni’s willingness to compromise, Stark refuses to reach an agreement and will not complete the closing,” the Leoni press release states. In Leoni’s view, the Stark Group is thus “in breach of contract,” and Leoni will take all measures to enforce its rights against Stark.
The sale was part of a refinancing concept for Leoni, one of the world’s leading suppliers of wiring systems for cars. Part of the sum would have been used to repay debt in agreement with banks and other creditors. This was the basis of the financing concept, which was designed to run until 2025. The creditors had agreed to extend the credit lines due at the end of the year for the time being. The financing concept would have to be renegotiated.
Leoni employs around 100,000 people in 28 countries and posted consolidated sales of €5.1 billion in 2021. The company describes itself as the market leader for wiring systems in Europe. Most recently, its business with carmakers had suffered badly, mainly because of well-known supply chain disruptions, especially in semiconductors. In the first nine months of 2022, a loss of €88 million had been generated on sales of €2.841 billion, down 5% year-on-year.