Schiess GmbH: progress on reorganisation

A few weeks after filing for self-administration, the tool machine manufacturer Schiess GmbH has taken the first steps on the way to a restructuring. In close cooperation with the relevant federal agency it has acquired the export licence for an important major order which can now be delivered. Order acquisition is running at full pelt and the creditors along with the shareholder are in support of the programme of reorganisation. Business is able to operate free of restrictions.

“Business is steady and we are now manufacturing again and supplying our customers with our customary level of quality”, Dr Robert Tobias of the ‘Restrukturierungspartner’ consultancy firm confirms. As the authorised representative, he is providing assistance to Dongyan Mei, the managing director. “To a major extent, this is due to the employees who have shown a high level of commitment. It is also important that our suppliers, banks and customers are giving us their full support and assisting our programme of reorganisation.”

Currently the workforce is preparing an approximately 160-tonne milling machine for transport to China for a major customer. The machine has been ready for several weeks and has been awaiting the issue of an export licence by BAFA (the Federal Office for Economic Affairs and Export Control) on which exports depend. This licence has now been granted. “This delivery will secure important sales for Schiess GmbH which will serve to further stabilise its financial situation”, according to the interim administrator, Prof. Lucas F. Flöther, who is overseeing the reorganisation in his role as representative of the interests of the creditors. “The contact with BAFA during recent weeks has been extraordinarily constructive.” Now another large machine has been completed and is at the yard awaiting an export licence which is likely to be issued within the next few days.

Parallel to this, Schiess GmbH has put every effort into acquiring new orders. At present, talks are being held with a number of potential new customers who have indicated an interest in long-term cooperation. “We are communicating closely with some well-known German firms”, says Dr Tobias. “Our aim is to broaden the company’s customer base – particularly in the medium-size machine segment.”

The management is at present collaborating closely with customers, creditors and the employee representatives in order to work out a programme of reorganisation aimed at getting the company back on to a profitable footing by April. The shareholder and creditors’ committee are fully in favour of the reorganisation in self-administration. Possible reorganisation scenarios include some type of settlement with the creditors as well as an investment solution. Initial discussions with interested parties are already under way.

To involve the company’s design and planning office in the restructuring, Schiess Tech GmbH, whose head office is in Berlin, also applied for a self-administration procedure in early February. The relevant local court of Magdeburg has already given approval and has appointed Mr Dirk Becker of the solicitors Flöther und Wissing as interim administrator. Schiess Tech develops construction plans for machines which are then manufactured by Schiess GmbH. The wages and salaries of the 19 employees are secured through the insolvency payments.

Restructuring in self-administration provides a legal framework to allow the company to re-establish itself while still operating. This is permitted by insolvency law in cases where companies themselves become proactive in the event of economic problems and where there is sufficient scope for action in order to achieve a resolution. With self-administration, Schiess intends to complete the realignment commenced several months ago in order to safeguard its international competitiveness for the long term. This particularly includes making changes to the product portfolio. In future the focus is to be on innovative machines in the medium-large segment and retrofit business so as to achieve the constant utilisation of capacity. Against this, the less profitable and very capital-intensive major projects are to be cut back.

The company Schiess GmbH manufactures lathes, drilling and milling machines for machining large components such as wind generators, turbines and ship’s engines. Among its customers are industrial firms throughout the world, particularly those in heavy industry, aerospace and mechanical engineering. The company currently employs 226 staff. Since 2004, Schiess GmbH has been part of the Chinese SYMG group of companies and this group is supporting the restructuring.

www.schiessgmbh.de