Bodilsen AS, a Danish maker of wood flat-packed furniture, has filed for bankruptcy protection. EQT Partners bought the company in late 2006 for DKK 1 million, and invested approximatelty DKK 100 million
The Board of Directors of Bodilsen A/S (Bodilsen) has on June 23 filed for bankruptcy at the Bankruptcy Court in Holsterbro, Thisted office. Several attempts to avoid an insolvency situation in Bodilsen have been made but have not been successful. The business of Bodilsen has consequently been suspended.
Bodilsen was acquired in November 2006 for DKK 1 million by the EQT Opportunity Fund which focuses on special situations including turn-arounds. In connection with the change in ownership, EQT Opportunity injected approximately DKK 100 million while lenders wrote off DKK 190 million leaving around DKK 300 million of debt in the company.
Bodilsen was in severe distress at the time of acquisition by the EQT Opportunity Fund which nevertheless saw an opportunity to bring back Bodilsen to profitability. A number of measures to turn the company around were indentified. In 2008, EQT Opportunity Fund injected an additional DKK 36 million into the company, bringing the total to DKK 136 million.
Operations have been streamlined and made less complex. Bodilsen has deepened its commercial partnerships with major customers. There has been a significant reduction of fixed costs and subsidiaries in China, Estonia, UK and the US have been closed down, sold or scaled back. A shift towards the growing segment of pigmented furniture has been made, necessitating extensive investments.
Bodilsen has been loss-making since 2002 and although the size of the losses has been reduced, the company could not continue operating in its current financial structure.
However, the recent decline in demand due to the economic crisis has been sharper and faster than anticipated and in June, Bodilsen’s financial performance and capital structure became unsustainable. Attempts to reach a mutual agreement with the company’s lenders for a financial reconstruction have been unsuccessful and the Board finally had no other option than to file for bankruptcy.
Bodilsen manufactures pigmented and solid wood flat-packed furniture. The company has operations in Northern Jutland, Denmark and has a staff of around 400 employees.