All the alarms have sounded at Sunsundegui, a historic bus body manufacturing company, located in the Navarrese town of Alsasua since 1944. The lack of liquidity stems from an “extremely delicate” financial situation, as defined by the Minister of Industry, Ecology and Digital Business Transition, Mikel Irujo, has led the company to request a pre-bankruptcy from creditors, leaving the future of more than 300 workers in suspense.
Sunsundegui expects a turnover for 2025 of 80 million euros with orders for the manufacture of around 500 vehicles, but the problem lies in the company’s inability to make immediate payments due to lack of liquidity. This, added to the fact that it carries a debt of 48.8 million euros, has forced the company to resort to this measure during debt negotiations with investors. For this, a maximum period of three months has been set.
As the advisor detailed, the company’s problems began during the pandemic due to the lack of parts in the assembly line due to “delays in engineering or financing problems”, which caused the production rate to drop to a single vehicle per day. Thus, the company lost margin “mainly due to additional costs not reflected in prices and due to the lack of adaptation of personnel to production”. “We are working both to improve inefficiencies and to negotiate prices with our customers”, he detailed.
The director and the consulting firm KPMG, which prepared a business plan for the company, also speak of an “oversizing” of the workforce, currently made up of more than 300 employees. At the end of 2023, the company had to hire 150 people to fulfill a Volvo order and had to hire additional staff at the beginning of 2024 “to resolve incidents” in certain positions. “Achieving profitability requires adjusting the production workforce,” said Mikel Irujo.
And Sunsundegui’s cash flow is in a “tight” situation. Cash flow estimates assume that the company would have liquidity until early September 2024 due to the receipt of Volvo’s down payment of 5.1 million, but that in September the company would not have positive liquidity “to continue to meet its most immediate obligations.” “, the advisor stressed.
The company’s debt amounts to 48.8 million, of which 8.9 million comes from suppliers and 39.9 million from “financial debts”. The advisor also mentioned the “tension” with suppliers, as well as the situation of imbalance of assets.
The company’s challenges, explained the advisor, involve producing a minimum number of buses and selling them to achieve minimum profitability or focusing on the most profitable models. “Also, obviously, in the search for potential investors and we maintain a permanent dialogue with the social area,” he said. Irujo stressed that there is a “boom” in the coach market in Europe and the world. “We have practically had a break for three years and with Covid, purchases have stopped, they have not been sold, no one has asked, in this case, for new buses and it is at the end of 2022 that the sector begins to recover,” he said. , adding that with the energy transition also, “the expectations of the registration sector, of the bus sector, are enormous.”
Regarding the contract with Volvo, the adviser said that “the manufacturing of the two new models is limited because what Volvo wants are buses, but what Volvo is doing is maintaining the order book, with the current models.” “It is not terminating the contract, there are no fewer buses in the factory, there are no fewer orders, it is changing the contract itself,” he said, adding that “Volvo currently has an order book that exceeds the current capacity that the company has.
