Machine tool producer Schiess GmbH to restructure in self-administration

'The self-administration procedure has no impact on business operations,' Dr. Robert Tobias of the consulting firm Restrukturierungspartner pointed out, who supports Managing Director Dongyan Mei as general representative. 'We will continue our production at full capacity, and we will also continue to fulfil all our orders on time and with constant high quality.' Wages and salaries of the employees are secured until the end of March with the insolvency money.

'This provides us with valuable financial leeway to press ahead with the restructuring over the next two months,' said Tobias.

The workforce was informed today at a staff meeting.

“The self-administration procedure according to German law is a legal framework for companies who want to maintain ongoing business operations while restructuring. Unlike in the case of regular insolvency proceedings, corporate responsibility remains in the hands of the management, and the management is also responsible for the restructuring. This is permitted by insolvency law when companies take action themselves at an early stage as soon as they encounter economic problems, and there is sufficient room for maneuver to find a solution. Instead of an insolvency administrator, the competent local court appoints an independent administrator (“Sachwalter”), who represents the interests of the creditors and monitors the proceedings. The administrator’s role is comparable to that of a supervisory board. Professor Lucas F. Flöther of the law firm Flöther & Wissing Insolvenzverwaltung was appointed provisional administrator for Schiess.

In the coming weeks, the management will work out a restructuring concept in close coordination with the creditors. Both a so-called insolvency plan, i.e. a kind of settlement with the creditors with a further involvement of existing financial partners, and an investor solution would be conceivable. The coming few weeks will show which solution is more promising.

'The Schiess GmbH has first-class and innovative products, modern production facilities with highly-qualified employees and premium customers all around the world,' Professor Flöther and Dr. Tobias explained. 'This is an excellent starting position for a successful conclusion of the restructuring process.'

The company began several months ago to reorganize its business activities in order to stay internationally competitive in the long term. This includes, above all, an adjustment of the product portfolio. In the future, the company will focus on innovative machines and the retrofit business, which will provide for a constant utilization of capacity. In turn, Schiess will scale back its less profitable and capital-intensive large projects.

The Schiess GmbH produces turning, drilling and milling machines for the processing of large parts such as wind turbines, turbines or ship aggregates. The company’s customer base comprises industrial companies all around the globe, particularly in heavy industry, aerospace and mechanical engineering. Schiess currently has 226 employees. In 2004, the company was bought by the Chinese SYMG Group, which supports the restructuring.