The expansion drive launched in 2008 by automotive supplier Polytec Group (Hörsching / Austria; www.polytec-group.com) has not only come to a screeching halt; it has moved swiftly into reverse gear. The rescue plan negotiated with lender banks to protect the Austrian group from insolvency after the credit crunch mandated rescheduling of debt foresees the sale of one of its crown jewels, Peguform (Bötzingen / Germany; www.peguform.de). Polytec acquired the automotive supplier last year from Cerberus Capital Management (www.cerberus.com).

The financing of the EUR 218.5m Peguform takeover with short-term loans totalling EUR 170m was one of the problems that crushed Polytec founder and CEO Friedrich Huemer’s dream of creating an automotive supplier large enough to negotiate with OEMs on its own terms. Sales of the expanded group rose to EUR 2.2 bn, but the new Polytec was burdened with debts exceeding EUR 350m, and major loans were due to be repaid or refinanced in May.

Peguform is to be acquired by Cross Industries, investment vehicle of Polytec major shareholder Stefan Pierer and UAIG, which together control more than 20% of Polytec’s equity. Through the transaction Pierer will sever his ties with the Austrian group, which will continue to be headed by Huemer. Reports say Peguform, which had sales of EUR 784m and EBITDA of EUR 51.4m in the first half of 2008, before being acquired by Polytec, will cooperate with loss-making motorcycle manufacturer KTM owned to 50% by Cross Industries.