German auto parts supplier Ruester GmbH files for bankruptcy

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German auto parts supplier Ruester GmbH files for bankruptcy

2022-12-05

According to foreign media reports, German auto parts supplier Ruester GmbH said that because high energy costs have caused problems with the liquidity of its assets to a certain extent, the company has applied for self-management restructuring. A self-administered restructuring is a special bankruptcy procedure that gives the business owner greater say.

Ruester has annual sales of about 120 million euros and has two acquisitions in 2022. "Due to insufficient funding during the acquisition process, delays in the transfer and integration process of the acquired plant, and significant cost increases, especially energy costs, the company is currently facing asset flow issues," Ruester said in a statement.

As part of the bankruptcy process, Ruester will look for a buyer to keep the company afloat.

About 722 German companies went bankrupt in October, up 15 percent from a year earlier, according to the IWH Economic Research Institute, with soaring energy costs caused by Russia's reduction in natural gas supplies being one of the reasons for these bankruptcies.

Parts shortages and rising commodity prices are putting financial pressure on European Tier 2 and Tier 3 auto parts suppliers, forcing them in some cases to renegotiate pricing with Tier 1 suppliers or require capital injections, or face the risks they face. The third option is bankruptcy. Soaring energy costs are exacerbating the pressure on these suppliers.

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