(Bloomberg) -- The finances of a struggling electronics supplier to BMW AG are under pressure following delays to a planned capital increase from a Chinese investor.
Italy-based Meta System SpA was set to receive the first tranche of a total 1.352 billion renminbi-equivalent ($187 million) equity boost from new investor Jianeng Meida Taizhou Holdings Co by Aug. 15, but the money hadn’t yet arrived as of Monday this week, according to people familiar with the matter, who spoke on condition of anonymity.
The deal is under review by Italy’s so-called Golden Power committee, which allows the government to block or adjust deals involving strategic assets, the people said. The company is now considering appointing a chief restructuring officer to carry out the capital raise, two of the people said.
Meta System is the latest car part maker to face pressures as a slowdown in global automotive output impacts the supply chain. In Italy, a supplier to Stellantis NV is negotiating a debt deal with creditors. On Thursday, the Italian government announced plans to double financial support to the automotive sector.
Meta System specializes in electronic systems for the automotive sector. The group counts Porsche, Volkswagen and Peugeot among its clients. It had 646 total employees at the end of 2022, according to its latest available annual report.
Jianeng Meida is a holdings company, incorporated in June in Taizhou, Zhejiang province. The contacts page of its website didn’t list a contact number or email. Representatives for Meta System and the Italian government didn’t respond to requests for comment. A spokesperson for BMW declined to comment.
Court Protection
Meta System filed for court protection from creditors at the end of September, according to filings seen by Bloomberg News. It has recorded losses in previous years, and relied on the financial support of its largest existing shareholder, Shenzhen Deren Electronic Co..
An Oct. 31-dated filing from Deren stated that the money had not been transferred. The filing attributed the delay to issues with the documentation needed to win approval from the Italian authorities. The funds are now expected by the end of the year, according to the filing.
Deren says that the delays have increased the uncertainty surrounding the transaction. If the capital increase faces further setbacks, Deren said it will look into alternative potential financing.
Representatives for Deren didn’t respond to requests for comment.
The company’s current shareholder base, on top of Deren, also includes Sichuan Gloport Investment Development Group, with Shenzhen Yuanzhi Fuhai New Energy Industry Co. and China Alliance Investments Ltd also owning smaller stakes, according to filings seen by Bloomberg News. By carrying out the capital increase, Jianeng Media, a holdings company incorporated earlier this year, would obtain 52% of Meta System’s equity.
--With assistance from Donato Paolo Mancini and Wilfried Eckl-Dorna.
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