Ilig, a family-owned thermoforming systems supplier headquartered in Heilbronn, Germany, has filed an application for insolvency proceedings in self-administration, which the Heilbronn local court accepted.
In recent years, the company has been battling extremely high costs due to inflation, interest rates and energy prices, the after-effects of the coronavirus pandemic and the consequences of international conflicts, all of which have weakened the company's financial situation. The situation has been exacerbated by the lack of investment in thermoforming and packaging machinery. Customers, have become skittish due to the interest rate developments and political conditions at national and international level, are reluctant to invest.
Attempts to attract investment from an external source to finance the growth and innovation Illig needs to compete in today’s changing markets, where customers are increasingly looking for sustainable and flexible solutions, have, to date, been unsuccessful.
Insolvency in self-administration is comparable to a Chapter 11 reorganisation in US law. It allows the company to reorganise its finances and business, a process Illig had already embarked on with the implementation of a comprehensive strategy programme. This is aimed at establishing a clearer production and supply chain strategy, an innovative technology focus and more intensive market development.
Unlike in standard insolvency proceedings, companies in self-administration do not have an insolvency administrator. The company can continue to be led by its management, Jürgen Lochner (CSO/CTO) and Carsten Strenger (CEO).To protect creditors’ interests, the court appoints a supervisor who is tasked with ensuring compliance with the rules set out in the Insolvency Code.
The court appointed Tibor Braun of IBK Illig Braun Kirschnek in Heilbronn as supervisor. Illig’s management will be supported by restructuring expert Jochen Sedlitz from Grub Brugger, a law firm in Stuttgart.
The restructuring process "should not result in any restrictions for customers," Illig said in a news release. The company will continue to operate as usual and plans to attend upcoming global events market platforms such as ChinaPlas 2024 and NPE2024 in Orlando, Fla., in May. Illig will be at Booth W7761.
Illig marked its 75th anniversary in 2021.
Looking ahead, the company’s shareholders and management are convinced that packaging will continue to be an indispensable component of branded products and that it will fulfill even more functions, especially in the area of product protection. At the same time, sustainability will play an ever-growing role in product perception.
These are mega-trends to which Illig intends to respond - with the support of partners from the market. The starting conditions for this investor process are good. Not only does the company have an extensive"installed base", it has also developed and patented a new packaging technology for non-plastic packaging, which will be launched next year.
The Illig Group operates eight service subsidiaries worldwide and has two production sites, one in Germany (headquarters in Heilbronn) and one in Romania.