devolo insolvency: Company draws up insolvency plan and restructures itself

The manufacturer of powerline adapters devolo has filed for insolvency proceedings and is reorganizing itself with the help of a protective shield. This has now been confirmed by the company itself. This will enable the company to press ahead with restructuring on its own, which has become necessary as a result of the ongoing Corona crisis and the global chip shortage.

devolo initiates insolvency proceedings

Aachen-based devolo AG is struggling with the COVID-19 pandemic and is repositioning itself with an insolvency plan using protective shield proceedings. “After a successfully completed pandemic year in 2020 and expected openings of area retailers in spring 2021, a positive sales development had initially been assumed. However, further pandemic-related retail closures and a change in buyer behavior, especially in the German market, then led to a decline in demand from the second quarter of 2021,” the company’s announcement states.

High inflows of goods from production facilities in the Far East also became a problem, which “led to very high inventory levels at the beginning of 2022, resulting in a liquidity bottleneck.”

In order to avert the threat of insolvency, the company plans to work out a restructuring plan in the coming months in close consultation with stakeholders and consultants. The chances of this are apparently not bad at all, since such a protective shield procedure would not even be possible if the situation were hopeless.

devolo must now submit an insolvency plan within three months. In the interest of the creditors, the realignment is now being monitored by a trustee.

Home network still in focus

Devolo, which recently introduced the new Magic 2 WiFi 6 Mesh powerline adapter, intends to continue to focus on the market with home network adapters. “In 2022, the company will continue to expand its portfolio to better serve customers’ individual needs for strong Internet and stable WLAN in every room,” devolo writes.

Nevertheless, the company is positive about the realignment and the rescue, as Heiko Harbers, CEO of devolo AG, reveals: “Our core business as well as the operating business are healthy. In addition, the market outlook is positive.”