Gleiss Lutz advises RHJ International on the restructuring of Honsel AG

Gleiss Lutz advised the private equity investor RHJ International SA (RHJI) on the restructuring of the automotive supplier Honsel AG.

A restructuring plan that RHJI agreed on with the Honsel lenders at the end of May has now been successfully implemented. In connection with the restructuring, RHJI provided the Honsel Group with EUR 50 million of fresh capital and, in return, secured a controlling stake in Honsel AG of 51%. The remaining stake of about 49% is now held by the senior lenders following a debt-to-equity swap. This reduced the secured term debt of the Honsel Group from EUR 540 million to EUR 140 million. The remaining financing agreements of the Honsel Group, which total approximately EUR 90 million, will not be affected by the debt-to-equity swap.

The employees of Honsel are also making a major contribution to the restructuring and to securing the company’s future. A combination of short-time work and reduced weekly working hours is intended to avoid dismissals for operational reasons and keep know-how within the company.

RHJI bought Honsel from the US private equity investor Carlyle in 2004 and, since then, has invested significant amounts in the expansion of the Honsel Group. Most recently, the Spanish Tafimé Group was acquired at the beginning of 2008. The Honsel Group has around 5,000 employees worldwide and, above all, manufactures light-metal components such as engine blocks, cylinder heads and transmission housings for the automotive industry. Honsel is among the leading suppliers worldwide in the area of light-metal casting technology.

During the restructuring, Gleiss Lutz provided extensive advice to RHJI on all aspects of German law. The Gleiss Lutz team was made up of: Dr. Jan Bauer (partner, corporate/M&A, Frankfurt) and Dr. Burkhard Jäkel (partner, banking and finance, Frankfurt) (both lead), Dr. Andreas Spahlinger (partner, restructuring, Stuttgart), Dr. Cornelius Götze (partner, corporate/M&A, Frankfurt), Dr. Doris-Maria Schuster (partner, employment, Frankfurt), Dr. Frank Merten (partner, employment, Munich), Dr. Burghard Hildebrandt (partner, state aid, Berlin) and Dr. Stefanie Beinert (partner, tax, Stuttgart).

The following were also involved: Dr. Björn Simon (restructuring, Frankfurt), Dr. Mario Stillig (restructuring, Frankfurt), Dr. Christian Vocke (corporate/M&A, Frankfurt), Dr. Stefan Mayer (tax, Frankfurt), Dr. Hendrik Sattler (employment, Frankfurt), Jörg Buschbaum (employment, Frankfurt), Dr. Ulrike Bär (tax, Stuttgart), Vanessa Bayliss and Dr. Maximilian von Rom (both banking and finance, Frankfurt).

Gleiss Lutz advised RHJI back in 2004 on its acquisition of the Honsel Group and has regularly advised RHJI since then, most recently in connection with a complete refinancing of the Honsel Group in the summer of 2007 and an initial restructuring at the beginning of 2008. In addition, Gleiss Lutz also advised RHJI and the financial investor Ripplewood, from which RHJI emerged, on other transactions (e.g. the acquisition of Reader's Digest).