Q: What does corporate restructuring mean?
A: The objective of the restructuring proceedings is to rehabilitate the viable businesses of a company, to facilitate the continuing operation of viable business units and to achieve a restructuring program that outlines, amongst others, how debts arisen prior to filing for restructuring (restructuring debts) are to be arranged and paid to enable the survival the company. The restructuring program may contain provisions aimed at the lightening of the debt load of a company: unsecured debt may be cut, and the payment schedule may be extended for all debts. The decision on the commencement of the restructuring proceeding is made by a competent district court based on the application of each company. In corporate restructuring, a district court will also appoint an administrator who drafts the restructuring program and supervises the company and its restructuring proceedings.
Q: Can the company continue its operations independently?
A: The management of the company is still responsible for decision making and will continue to manage the business normally. However, certain significant decisions and actions require prior approval from the administrator.
Q: What is the schedule for the proceedings?
A: The proceedings will progress in the following stages. For example, in Finland:
1) A restructuring application will be filed; a district court will announce its decision approximately within two weeks to month.
2) If the application is accepted, the restructuring proceedings will commence
3) The restructuring proceedings generally last for 12-18 months and end upon the approval of the restructuring program by the court
4) The payment programs for restructuring debt may last for several years (e.g. in Finland, the average is 6,5 years), depending on the amount of restructuring debt and other measures undertaken as part of the restructuring program.
Q: Will Componenta continue its business during the application period?
A: Componenta has to continue its operations normally during the entire proceedings in order to be able to show its capability for healthy business.
Q: What does bankruptcy mean?
A: Bankruptcy means the liquidation of the assets of a legal entity. The trustee appointed by the local court is entrusted with the administration of the bankruptcy estate, to which the company’s assets are transferred upon commencement. The company’s directors are no longer authorized to dispose of the company’s assets. The trustee will sell off all assets and attempts to maximize the proceeds in order to repay the debts as much as possible. The trustee may, by approval from the creditors, decide to continue the company’s operations in order to be able to sell the assets or business as “going concern”.
Q: What is the schedule for the proceedings in the Netherlands?
A: The Dutch subsidiary Componenta B.V. has been declared bankrupt on 2 September 2016. The length of the proceeding depends on the ability of the trustee to sell the assets of Componenta B.V.
Q: How about the parent company’s share? Is the company still listed on Nasdaq Helsinki?
A: Componenta Corporation will remain listed on Nasdaq Helsinki during the restructuring proceedings.
Q: How about the Componenta’s subsidiary Componenta Dökümcülük in Turkey? What happens to it?
A: Company’s subsidiary in Turkey will remain listed in the Istanbul Stock Exchange. The intention is that it will continue its operations without any official proceedings.
Q: What happens to customer deliveries during the corporate restructuring in Finland and Sweden?
A: In Finland and Sweden the corporate restructuring proceedings as such will not have an effect on the customer deliveries or the undertakings of the company. The intention is to continue the customer deliveries normally.
Q: How Componenta will finance its operations during the corporate restructuring?A: In a short term, the companies in Finland and Sweden have agreed on with their main customers on a prepayment arrangement which will help these companies with working capital financing.
Q: Will Componenta limit its production?
A: The intention is not to limit production.
Q: What happens to customer deliveries in the Netherlands?
A: The trustee will make the decisions regarding the customer deliveries. The other Componenta Group companies are willing to start the deliveries to the customers of Componenta B.V. if possible.
Q: What happens to the receivables of suppliers in the corporate restructuring proceedings?
A: A so-called standstill period takes effect subject to the district court’s interim decision or, finally, the decision regarding the commencement of proceedings prohibiting repayment and enforcement of restructuring debt.
Restructuring debt means debt incurred before the filing of the restructuring application. Unsecured restructuring debt (for example trade payables) may be subject to a haircut pursuant to the restructuring program.
New debt means debts incurred after the filing of the restructuring application. New debt shall be paid by Componenta as it falls due.
Q: What happens to receivables of suppliers in the bankruptcy?
A: The trustee appointed by the local court will decide on the liquidation of the company’s assets. The proceeds of the liquidation less the bankruptcy estate’s costs and debts of the estate will be distributed to creditors based on the mutual ranking of claims as set forth in the applicable law.