The Fanatec saga of 2024 has taken yet another twist, and a turn for the worse, as the brand’s parent company has filed an application to begin insolvency proceedings.
It’s been a pretty crazy few months for Fanatec and its owner Endor. While it’s likely the public troubles began with a chaotic Black Friday, things only really kicked off in March when the company suddenly announced that it had dismissed its founder and figurehead CEO Thomas Jackermeier.
At the time, this was stated as being a condition of its creditors — lending banks — to allow the company to extend a “standstill agreement” on some pretty hefty loans. Andres Ruff was brought in as a “chief restructuring officer”, and was then announced as CEO very shortly after.
Jackermeier though held onto his significant share ownership, reportedly being the company’s single largest shareholder. Armed with this, the company’s founder was attempting to assemble a consortium to bring it back under his control but Endor and US peripheral manufacturer Corsair announced a preliminary takeoever agreement — and a short-term line of funding with certain intellectual property used as collateral.
This became the preferred option of the creditors and Endor, and the company began a restructuring under a unique German process known as “StaRUG” — the Corporate Stabilisation and Restructuring Act — to avert insolvency. However while this would have included a partial waiver of debt, estimated to be around €70m ($76m) at the time, it would have also resulted in shareholders leaving the company without compensation.
That escalating things further, with a court in Endor’s home town of Landshut authorizing an Extraordinary General Meeting (EGM) on behalf of “two shareholders” — one of which is presumed to be Jackermeier — in mid-July.
The agenda for this included a withdrawal of confidence in key members of the company as well as seeking the dismissal of the supervisory board. Endor objected to the EGM on the basis that any changes to management or the supervisory board could result in the unilateral termination of the agreement with Corsair and threaten the StaRUG process.
According to today’s announcement from Endor this is precisely what has come to pass, and the statement — though only representing one side of this apparent power-struggle — pulls absolutely no punches in laying the blame for everything at Jackermeier’s door.
Endor states that the StaRUG process has failed, citing “the request by the former CEO and majority shareholder” (again presumed to be Jackermeier in both cases) to convene the EGM. It added that negotiations with the same individual regarding a reorganization that included all shareholders had failed “due to unrealistic demands”.
As a result of all of this, Corsair has stopped its bridging finance to Fanatec, while lending banks are also not keen to provide any further funding in light of Endor’s high debt-to-income ratio — owing €95m ($103m) compared to €100m ($108m) of annual sales.
It’s a debt that Endor blames on management mis-steps over the last few years, citing an “oversized construction” of a new company HQ, errors in chip and merchandising orders resulting in a loss of value in assets, and a curious, unspecific note of “failures to introduce processes and systems worth millions”…
Whatever the causes, Endor is now in the last-chance saloon of insolvency proceedings. Day-to-day customer-facing processes — sales, warranty/repair services, and driver/software updates — will continue for the time being, and the company believes that Corsair is still interested in buying the brand.
Ruff comments that: “As part of the insolvency proceedings, we will continue the restructuring and work at full speed to reorganise the company. We are confident that we will emerge stronger from this situation and return to a sustainable, profitable growth path.”
