“Unhealthy business direction”
Telephone manufacturer Gigaset is bankrupt
September 19, 2023, 10:47 p.m
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Gigaset has long focused on the production of landline telephones. The incumbent CEO sees this strategy as a mistake made by his predecessors. Now he wants to turn things around. However, bankruptcy could no longer be avoided.
The landline telephone and smartphone manufacturer Gigaset is bankrupt. The company from Bocholt with 850 employees announced an insolvency application due to insolvency of the listed parent company and wants to reorganize the operating subsidiary Gigaset Communications GmbH on its own. The reason for the bankruptcy was “an unexpected and significant decline in sales in the second half of the year”.
Demand continued to weaken and Gigaset ran out of money. The negotiations with lenders and lenders had “not been sufficiently fleshed out to secure the necessary inflow of funds to continue Gigaset outside of insolvency proceedings,” it said.
Earnings forecast lowered
CEO Magnus Ekerot, who came from Bosch at the beginning of the year, blamed the former management for the imbalance: “Gigaset has not been able to compensate for the decline in its core business with cordless telephones (…) over the last few years.” This “unhealthy and one-sided business orientation” contributed to the unfortunate situation. Now it’s about putting Gigaset on a solid economic basis. In addition to telephones, Gigaset also produces smoke detectors and alarm systems.
Since 2014, Gigaset has been majority owned by the Chinese investor Sutong Pan through his investment company Goldin Financial Holdings. According to the data service provider LSEG, he most recently held 72 percent of the shares. The company was recently worth 42 million euros on the stock exchange. The former Siemens subsidiary was sold to a financial investor in 2008.
Two weeks ago, Gigaset revised its forecasts significantly downwards. Contrary to expectations, sales and operating profit (Ebitda) in the current year should be significantly below the previous year’s level. In 2022, Gigaset had sales of 241.3 million euros and generated an Ebitda of 17.9 million euros.