And yet, he also brought news for his clients and investors that the company's parent organization and financing source, Cinterion Holding, GmbH, had filed for bankruptcy and financial reorganization under the German courts.
We spoke with Muhrer last week, who shared more details about the logic behind the decision to file for protection. “The operational company is safe and sound,” he said, describing a new beginning for the company, and a new chapter in its history.
During a flurry of meetings at CTIA, Muhrer and Cinterion’s executive team told their customers and partners that under German law, insolvency is safeguarded such that “the holding insolvency has absolutely no impact on the operation of the company.”
Disbelief has accompanied the spreading news of the refinancing. During the last two years, once profitable brands have faced the grip of the recession. But it is unusual when the company continues to perform as the market leader.
Muhrer said it is suitable, from a certain perspective, to compare this reorganization to the home owner, who in the economic crisis, surveys his or her financial foundation and thinks, “This loan is too heavy. I can do better.”
After the filing in Munich on 22 March, the week of CTIA would continue with Cinterion news of automotive Land Grid Array (LGA) modules for process manufacturing, eToll, eCall, and fleet management. From home base, Cinterion would also jointly announce with Telenor Connexion that week that they would pair HC25 modules and Telenor SIM cards for a new deployment with Hitachi Construction Machinery’s Global e-Service. Cinterion concurrently released sales data from 2009, confirmed by ABI Research, showing market growth and profits.
To provide deeper context, Muhrer highlighted the company’s history, since spun out of Siemens’ wireless manufacturing business two years ago.
“The company was founded in 2008 when there was no crisis on the market yet. And then the crisis happened,” he said. “We were lucky to the extent that we were small, we were fast, fast to implement changes and cost savings which would have been a difficult job if we were inside a huge conglomerate.”
This explains the success of the operating company, yet leaves questions as to the timing, and what else may be in the works.
Muhrer and the Cinterion executives confirmed there had been no change of ownership recently, but could not speak to market valuations or any potential change in ownership of the company.
Yet, the Financial Times German version (FTD) carried news last week that an offer had been made on former Siemens-owned wireless module company.
Citing an undisclosed source, FTD reported that Cinterion’s biggest creditor, Swedish fund EQT, made a bid to acquire the business. The offer was unsuccessful and prompted Cinterion’s owner, Hamburg-based private-equity firm Granville Baird GmbH, to announce that it would continue investing significant amounts for its own growth, according to FTD and Bloomberg News.
Muhrer estimated that ongoing work for the reorganization would culminate in May. “At the end of the financial restructuring process, we're going to have a lighter finance structure which will then be suitable to begin post-crisis business planning again.”