The general methodology is to
filter options with killer criteria
and hard criteria to screen out
restructuringPoteantialtl oeptironns atives
Procedure
Pre-selection
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• Dinova • BOSCH Thermo Technik • Linde forklifter
• Whirlpool’s refrigerator JV in Beijing
• Peugeot Guangzhou • Liebherr • Siemens
investment projects
Charact
structure
– Buyout
– Sell out equity
-eristic
– Termination
– Bankruptcy
– Freezing (walk away)
Exampl es
• Bosch Siemens • Siemens • Bayer • Henkel • ABB
Turnaround
full control the board of directors
II. Equity structure
No
YesΒιβλιοθήκη YesYes• Geberit gains full control
restructuring
- Equity buyout
III. Withdrawal
(1) Sell out equity
Killer criteria
• Solve key problems • Secure future success
In-depth evaluation
General • Cost • Time • Risk
Hard criteria
Integration (GSHA-GDAI) • Sales & marketing • Management • Others
killer criteria Chinese
Partner in?
Killer criteria Solve key Secure future
Pass?
problems
success
Remarks
I.
Yes No
No
No
• It’s very hard to implement future integration and consolidation without
long-term development • Performance improvement
• Performance improvement
• Withdrawal from existing
without changing the equity
with equity structure change
罗兰贝格-结构咨询报告(英文)
D1.
General options and pre-selection
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-2-
In China, as far as foreign investment enterprise is concerned, there exist three main restructuring categories
(4) Freezing
Yes
No
No
No
• Freezing will ruin Geberit’s relation
with local government, thus causing
potential hurdle for future presence
and trouble to GDAI
Yes
No
No
No
• It’s almost impossible to find a buyer
(2) Termination
No
Yes
Yes
Yes
• It opens the way for a new start
(3) Bankruptcy
No
Yes
Yes
Yes
• It opens the way for a new start
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Back -up
Buyout
Definition of some options
• To buyout the equity ownership from Chinese partner, thus turning the JV into a wholly foreign owned enterprise (WFOE)
Turnaround of JV
Restructuring of investment
projects in China
Equity structure restructuring
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Withdrawal
On the basis of favorable
results of market and
competitive analysis, option
category I and II are most
commonly used for companies’ Option 1: TurnaroEuqnuditoyfsJtVruOcptutiorenr2e:structurinOgption 3: Withdrawal
Conclusion
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Restructuring alternatives Implementation
At pre-selection stage,
turnaround, sell out equity and
freezing can be eliminated with Pre-selection
Terminat ion
• To cease operation and liquidate the JV
Bankrup tcy
• To file bankruptcy and liquidate the JV. If the creditor is JV’s foreign parent company, to file bankruptcy by creditor is theoretically possible but practically infeasible in China