Coronavirus will have long-term effects on the economy. The results of the annual balance sheet may result in some companies not starting restructuring until next year. This applies, among others, to the automotive industry, which was severely affected by the global economic slowdown, and the pandemic, which had a negative impact on car sales and temporarily blocked imports, exacerbated this crisis.
Tesla’s relatively good results in the wake of coronavirus, and in Europe – the tightening of environmental regulations, should accelerate the transformation towards electric automotion. It may entail both the conversion of the production lines to serve new technologies, as well as new investments.
Car companies, technology producers, as well as investors may, in the near future, become entities in a greater number of consolidation and restructuring processes of a broader scope.
VDR can be used in the restructuring process already at the stage of creating a recovery plan, as well as in negotiations with investors (banks, private equity funds) and in the management of personal data. The system allows access to documents only for authorized persons and has a Q&A module that ensures centralized and effective communication. On the other hand, reports on the activity of Virtual Data Room users allow us to better define the course of the process.
In 2019, the automotive industry witnessed several mega-transactions, including the merger of PSA and FCA, as well as Daimler and Geely. In the following years, however, we should observe increased transaction and restructuring activity of small entities. In this way, they will try to ensure access to a larger technological base, the absence of which could obstruct or prevent the introduction of modern eco technologies.
Small producers may soon have a problem not only with ensuring financial liquidity, but – due to the lack of capital comparable to car giants – also with the implementation of investments, which will also result in a greater number of credit proceedings and related processes, such as audits or Due Diligence.