The Spanish coachbuilder is trying to buy time with creditors in an effort to stave off entering administration
In an effort to buy time to allow itself to turn the business around, Spanish coachbuilder Sunsundegui has entered pre-bankruptcy. Based in Alsasua, Navarra in northern Spain, the company has operational debts of around €48.8m, and has received cash injections of around €9m from the regional government and €5.1m from Volvo, which recently pulled out of a partnership with Sunsundegui to build its 9700 and 9900 coach range, for which it had already taken on new staff and started tooling up production lines.
Founded in 1944 and with a presence in over 20 countries in Europe, Africa, and Asia, the company is hopeful that its order book for 2025 will see it through, though Spanish newspaper El Diario reports the company as suffering from a ‘lack of liquidity resulting from an extremely delicate financial situation,’ leading the company to request pre-bankruptcy proceedings, leaving the future of its more than 300 workers up in the air.
The manufacturer reports a revenue forecast for 2025 of €80 million, with orders for the manufacture of around 500 vehicles, but is suffering from an inability to meet immediate payments due to lack of liquidity, coupled with its debt of €48.8 million, which together have forced the company to take the step whilst it negotiates with investors, a process for which it has allocated a maximum of three months.
The newspaper reports that the company’s problems began during the pandemic, due to the lack of parts on the assembly line as a result of ‘engineering delays or financing problems’ which meant that its production rate dropped as low as one vehicle per day. The company says that it is working to address staffing and cost issues to improve inefficiencies, and to negotiate prices with its customers.
Consultancy firm KPMG has drawn up a business plan for the company, and refers to an ‘oversized’ workforce, currently made up of more than 300 employees; at the end of 2023, the company hired 150 new staff for its anticipated Volvo partnership, with more being taken on early this year. It is likely that many of those extra jobs are at risk, with a reduction in workforce expected following Volvo’s change of mind.
It is reported that Sunsundegui expected to have cash until the beginning of September 2024 due to the receipt of an advance from Volvo for €5.1 million, but would not have positive cash to continue satisfying its most immediate obligations during September.
The company’s debt of €48.8 million is made up of €8.9 million owed to suppliers and €39.9 million of ‘financial debt.’
