Illig Maschinenbau GmbH, a German thermoforming machinery supplier, has entered insolvency proceedings in self-administration.
The court in Heilbronn, Germany, the site of Illig's headquarters, accepted an application to begin the process.
In recent years, the company has battled extremely high costs due to inflation, interest rates and energy prices, the after-effects of the coronavirus pandemic and international conflicts, all of which have weakened the company's financial situation. Those issues were 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 investments from an external source have been unsuccessful.
Insolvency in self-administration is comparable to a Chapter 11 reorganization in the U.S. It allows the company to restructure its finances and business, a process Illig had already undertaken outside the court through a comprehensive strategy program. The project aims to establish a clearer production and supply chain strategy with 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, CEO Carsten Strenger and Jürgen Lochner, chief sales office and chief technology officer. 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, Illig said its 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.
Illig also said it will respond to those megatrends with the support of its partners in the market. The company has an extensive "installed base" and is developing a patented new non-plastic packaging project it will launch in 2025.
Illig Group operates eight service subsidiaries worldwide and has two production sites, one in Germany and one in Romania.