The managing board of Neschen AG has filed for the opening of self-administered insolvency proceedings in Buckeburg to be able to continue the restructuring process autonomously. This does not affect the operative business of Neschen AG and the European distribution companies are not affected by the insolvency.
Bückeburg Local Court - Insolvency Court – has granted the application and permitted self-administered preliminary insolvency proceedings to facilitate the restructuring of the company.
Arndt Geiwitz of Schneider Geiwitz and Partner has been appointed provisional trustee of creditors. Managerial responsibility remains in the hands of the managing board, which co-opted Dr. Bettina Breitenbücher as an insolvency specialist in addition to the CEO, Henrik Felbier. She will assist the restructuring process in insolvency as a CRO.
Michael Aupke had offered the supervisory board his retirement from office earlier. The supervisory board accepted. “As we have already managed to increase our earnings we now want to use the insolvency to reduce the company’s debt. We want the company to emerge from the insolvency stronger,” said Felbier.
Over the coming weeks the managing board will work with the creditors and the works council to draw up a reorganisation plan.
Neschen AG has not received a positive forecast for its continued existence, nor are there indications that the negotiations with its creditors will be completed successfully. Therefore the company must file for insolvency proceedings because of over-indebtedness. Despite extensive negotiations with the principal creditor the refinancing of 24.3m Euro (plus 20m Euro debtor warrant bond) failed. The intention is now to use the insolvency proceedings to reduce the company’s indebtedness.
Felbier added: “Although the operative restructuring of the company was completed successfully, we would not have been able to service the loans properly from our earnings. To our regret, Sandton was not prepared to make a positive contribution to refinancing. In addition, the shareholdes had opted against the replacement of loan capital by equity capital earlier, so we were left with no choice but to file for insolvency. The only possible conclusion is that Sandton was not interested in a sustainable solution for Neschen without insolvency from the beginning.
The situation has been aggravated by the fact that it is currently unclear who rightfully owns Neschen’s loans – J.P. Morgan or Sandton
With potential concern regarding continued supply of Neschen products in the UK, Art System MD, Steve Hawker commented.
“Having spoken with Senior Management at Neschen AG we are confident that their announcement of self-administered insolvency will not affect ongoing supply of Neschen product here in the UK. We understand this is a necessary step to allow them to complete their restructuring and expect Neschen AG to emerge a stronger company at the end of the process.
We are still placing orders and receiving deliveries as normal furthermore we expect the strong year on year sales growth we have experienced to continue moving forward assisted by the addition of some great new innovative products from Neschen.”
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