Gigaset files for insolvency proceedings - continuation of operations under self-administration

Bocholt, September 19th, 2023 - The Executive Board of Gigaset AG today decided to file an application for the opening of regular insolvency proceedings for Gigaset AG and an application for the opening of insolvency proceedings in self-administration for its indirect subsidiary Gigaset Communications GmbH at the competent local court in Münster due to illiquidity.  The development, production and sales activities of Europe's market leader for DECT cordless phones will continue unchanged. The aim is the sustainable restructuring of the economic basis of the telecommunications company.

Gigaset is an internationally active communications technology company based in Bocholt, Germany. The medium-sized company is Europe's market leader for DECT cordless phones and is also a leader internationally with around 850 employees and sales activities in over 50 countries. The business activities of the traditional company with a 175-year history also include Android-based smartphones for private and business customers, cloud-based smart home offerings and business telephony solutions for SoHo, SME and enterprise customers.

The background to the application for insolvency is essentially an unexpected and significant decline in revenue in the second half of 2023 and thus a business performance significantly below plan with a persistently weak demand for Gigaset products, which continues to worsen, as well as a general reluctance to buy and consume in Germany and Europe with corresponding effects on the company's liquidity. Negotiations with capital providers for new equity or debt capital have not yet been sufficiently substantiated to secure the necessary cash inflow for the continuation of Gigaset outside of insolvency proceedings.

Dr Magnus Ekerot, CEO and Chairman of the Executive Board of Gigaset AG, commented: "Gigaset has not been able to compensate for the decline in its core business with DECT cordless phones by setting the right course in the new business areas over the last few years. This unhealthy and one-sided business orientation and the now occurring unexpected and significant decline in revenues in H2 2023 have led to the current situation."

The business activities will continue unchanged, whereby the profitability of each individual business unit will be intensively examined as part of the restructuring process. "Our employees will continue to do their best in this challenging situation to provide our customers with high-quality and sustainable telecommunications solutions," Dr Ekerot continues. Wages and salaries of employees will be covered by the Federal Employment Agency until the end of November 2023 as part of the insolvency compensation.

The filing for insolvency opens up the possibility of a fundamental restructuring for Gigaset. "This step, which is now necessary, enables us to restructure the company from the ground up and put it on a solid economic footing," affirms Dr Ekerot. 

Together with Dr Ekerot, the administrator to be appointed will implement the further measures for the continuation of business operations with the involvement of the creditors' committee. The focus of the next few weeks will be on the implementation of the restructuring concept.

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