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Deutsche Nickel: A case study on German Restructuring By Matthew Prest, Director of Corporate Restructuring Group PowerPoint Presentation
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Deutsche Nickel: A case study on German Restructuring By Matthew Prest, Director of Corporate Restructuring Group. 1.1 Introduction: background to VDN. Company overview Global leader across many markets Growth through series of acquisitions (particularly in 90’s) Main activities

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Deutsche Nickel: A case study on German RestructuringBy Matthew Prest, Director of Corporate Restructuring Group

1 1 introduction background to vdn
1.1 Introduction: background to VDN
  • Company overview
    • Global leader across many markets
    • Growth through series of acquisitions (particularly in 90’s)
    • Main activities
      • non-ferrous metal technology (‘NFMT’)
      • payment systems
      • home decoration (Coswig)
      • fastening systems
    • 3,000 employees, Turnover c.€650m
1 2 deutsche nickel overview
1.2 Deutsche Nickel: overview
  • Company overview
    • NFMT and Payment Systems divisions
    • NFMT: nickel semis and alloys for industrial processing
    • Payment Systems: EuroCoin
      • European leader for coin blanks production
    • Turnover c.€250m
    • 1,300 employees
    • Key operations in Schwerte and Saxony
1 3 capital structure overview

100%

100%

100%

100%

100%

100%

100%

100%

1.3 Capital structure overview

Guarantee

VDN AG

€84.0m

€130m (Intercompany) Liability

€104 million,7.125% Notes due 2006

DeutscheNickel AG

EuroCoin AG

€25.0m

€39.0m

AuerhammerMetalwerke GmbH

DeNiSysGmbH

€11.0m

< €1.0m

Deutsche NickelPresstec GmbH

ComcardGmbH

< €1.0m

<€1.0m

Deutsche NickelAmerica Inc.

€6.0m

Saxonia

Edelmetalle GmbH

€8.0m

95%

SaxoniaEurocoin

€4.0m

1 4 deutsche nickel background
1.4 Deutsche Nickel: background
  • Trading problems in 2004
    • losses at Euro Coin
    • lower demand, price war, margins hit
  • Notes traded – 4 key funds
  • July ’04 : Company proposal to Noteholders
  • August ’04 : Close appointed financial adviser
  • Sept ’04 : Company proposal rejected
    • principle of debt: equity swap raised by notes
    • Haarmann Hemmelrath appointed noteholder representative
1 5 deutsche nickel key issues
1.5 Deutsche Nickel: key issues
  • Bank’s security over operating companies
    • potential breach of negative pledge
  • Complex capital structure
  • Trade union agreement for asset transfer
  • Diverse ownership of notes
    • difficult to identify
    • exchange offer failure
  • German legal issues
1 6 deutsche nickel solutions
1.6 Deutsche Nickel: solutions
  • Debt for equity swap (equity provided pro-rata to claim)
  • Bank debt purchased by Ad Hoc Committee
  • New CEO – operational plan agreed
  • UK CVA debt restructuring planned
1 7 deutsche nickel debt restructuring
1.7 Deutsche Nickel: debt restructuring
  • Deal with VDN: cash and guarantee waiver
  • UK parentco established
  • Assets transferred to German LLP
  • LLP transferred assets to UK company
  • UK administration with CVA (only 75% consent required)
  • June ’05 : CVA appointed by creditors
1 8 deutsche nickel debt restructuring
1.8 Deutsche Nickel: debt restructuring

Pre restructuring

Post restructuring

DNICK Ltd.

(Newco)

CVA Creditors

DNICK Holding plc

EU Coin Ltd

DNICK Holding plc

Deutsche Nickel GmbH

EU Coin Interco Ltd

Deutsche Nickel GmbH

EU Coin Interco Ltd

Subsidiaries

Eurocoin GmbH

Subsidiaries

Eurocoin GmbH

Subsidiaries

Subsidiaries

1 9 deutsche nickel other issues
1.9 Deutsche Nickel: other issues
  • Pensions : state guarantee crystallised
  • Tax : real estate transfer tax