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January 1, 2008
3 Min Read
There have been significant developments around the status of injection molding machine maker Battenfeld Kunststoffmaschinen (BUK; Kottingbrunn, Austria) since we posted a story last Friday describing how the company had filed for insolvency protection on Jan. 2 in the Austrian courts.
The insolvency filing, which is similar to U.S. bankruptcy filing, followed the sale of the company to a newly formed investment business in London named OOD by Adcuram (Munich, Germany), the equity investor that had acquired BUK in October 2006. Battenfeld management said it had not known of the sale in advance or even at the time of the sale, but as soon as it learned of the event, it looked at its financial situation and decided to file for insolvency protection with the aim of restructuring the company.
For starters, the sale has been cancelled, according to an Adcuram press release on Jan. 4. Then, a press release from Battenfeld on Jan. 9 said that all parties—Adcuram, Battenfeld, the court-appointed attorney handling the insolvency petition, and Austrian regional government officials—have agreed to work together. They also agreed to make no further public comment.
Following the insolvency filing, Adcuram immediately found itself the subject of much negative and even hostile attention from Austrian news media, as well as from government officials in the region south of Vienna, where Battenfeld is located. Possible lawsuits were being discussed, which now have been called off by those government agencies. In the Jan. 4 German-language-only release, Adcuram stated several times that it had done nothing wrong in selling the company, and also presented its view of the company's finances. It also said it had cancelled the sale.
In its release, Adcuram took exception to Battenfeld management's claim of being surprised by the sale. The equity firm said it had sunk more than euro 15 million into Battenfeld during 2007, a period when many plastics machinery manufacturers were registering record or near-record revenues. It wrote that Battenfeld's problems are internal, the result of its past management and its cost structure, combined with a competitive market that forced it to sell machines at a loss.
Adcuram says it paid Battenfeld more than euro 1 million for the company's service and parts business, which it spun off as a separate company that it apparently still owns. Canceling the sale was said to have no effect on the bankruptcy filing, which Battenfeld management predicated on, among other things, the lack of an urgently needed capital infusion from either Adcuram or OOD.
It was reported at the end of last week that BUK's 427 global employees had not received their December paychecks. The Austrian news service Niederoesterrechische Nachrichten (NÖN) further reported that the firm must lock its gates late this week unless euro 15 million in equity comes to BUK.
NÖN reported on Jan. 7 that it had traced OOD's ownership to a lawyer named Matthias Beer, who is with the law firm Schumacher Lotz. On its website, the law firm lists its Munich neighbor Adcuram as a client “on the purchase and sale of numerous businesses.”
Though the parties are talking now, the situation could change at any moment. We will strive to keep you informed as the story unfolds. (reporting by Modern Plastics Worldwide)
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