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Update: Adcuram repeals sale of Battenfeld; bankruptcy unaffected

January 8, 2008

3 Min Read
Update: Adcuram repeals sale of Battenfeld; bankruptcy unaffected

The story of last week’s unexpected insolvency filing by injection molding machine manufacturer Battenfeld Kunststoffmaschinen (BUK; Kottingbrunn, Austria), and the circumstances of the Dec. 20 sale of the firm by equity investor Adcuram (Munich, Germany) to a newly formed outfit in London called OOD that had neither phone number nor email address nor website, now has taken another turn as Adcuram announced late Jan. 4 that it cancelled the sale.

Adcuram officials state repeatedly in a release dated Jan. 4, 2008 that they did nothing wrong in selling BUK, which they acquired in October 2006 from German sheet metal machinery manufacturer SMS. Adcuram has been positively pilloried in Austrian newspapers, though, and politicians responsible for the region in which BUK is headquartered have spoken openly in these newspapers about possible lawsuits against the German equity investor. Adcuram openly addressed such talk in its press release (available to now only written in German) issued 4 January.

To briefly rehash: Adcuram acquired Battenfeld, which has been unprofitable for many years, and announced it would invest in the firm and conduct a turnaround. One step it took was to separate the aftersales/spare parts business from the machinery manufacturing business; Adcuram says it paid Battenfeld more than euro 1 million for this (still solvent) service/spare parts business. As late as October of 2007, Adcuram officials stated BUK was on the road to financial stability and reiterated their resolve to stick with the firm, bringing in former Engel President Georg Tinschert on Dec. 1 to manage BUK. Then, without notifying current BUK management until after the fact, Adcuram sold BUK to OOD on Dec. 20. BUK management couldn’t contact OOD and were not contacted by OOD, and BUK’s 427 employees still have not been paid for December. Tinschert and crew filed for bankruptcy last week.

The repurchase will have no immediate effect on the bankruptcy filing, and Austrian news service Niederoesterrechische Nachrichten (NÖN) reports the firm must lock its gates late this week unless euro 15 million in equity is injected into BUK coffers.

As reported in last week’s e-Weekly, OOD did not contact BUK management nor could they contact it. Adcuram took umbrage at BUK management’s statement that the bankruptcy filing in Vienna was forced by the “sudden and unexpected” sale of BUK.

In fact, reports Adcuram, Batteneld’s problems are internal and the result of past management problems, its cost structure, and a broader market competitiveness that Adcuram says has forced BUK often to sell its machinery at a loss. Adcuram says it sank more than euro 15 million into Battenfeld during 2007, a period, it accurately notes, in which many plastics machinery manufacturers were reporting record- or near-record revenues.

This tale has yet to end. NÖN also reported in a story filed Jan. 7 that it traced OOD’s ownership to a lawyer, Matthias Beer, employed at law firm Schumacher-Lotz, which at its website (www.schulotz.com) lists Munich neighbor Adcuram as a client “on the purchase and sale of numerous businesses.” Beer offered no comment.

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