Insolvent independent German paper mill Feldmuehle is set to continue with around half of its previous workforce following the implementation of its restructuring plan.
Last month the business discontinued its production of graphic papers and said it would switch its focus to packaging and labels grades. The company’s paper machine 2, which was used to produce graphic papers, was subsequently shut down.
Under its former guise, Feldmuehle Uetersen had initiated insolvency proceedings in January 2018. It was bought five months later by Feldmuehle GmbH, an acquisition vehicle founded by Kairos Industries, a subsidiary of Berlin-based private equity company Beteiligungsgesellschaft.
On 19 November 2018 Feldmuehle GmbH then filed for an application at the Pinneberg Local Court to re-enter insolvency, although this time under its own administration, after it was affected “adversely and unforeseeably by unexpected increased energy costs and procurement prices for raw materials”.
The court ordered the provisional self-administration on the same day and Dietmar Penzlin of Schmidt-Jortzig Petersen Penzlin in Hamburg was appointed as provisional administrator, although Feldmuehle’s management team continued to run the business.
The company’s management presented their new business model to staff early last month and simultaneously began the negotiation of the social plan with the works council.
On Monday this week (28 January) the management and the works council signed a “reconciliation of interests” and social plan as part of the restructuring plan.
The business offered affected employees the opportunity to switch to a transfer company this Friday (1 February) in order to further qualify for the job market, an offer that the majority have accepted.
Feldmuehle will therefore continue its business operations from 1 February with around 200 staff – down from around 400 previously – and will now produce an annual volume of around 75,000 tonnes.
“The new specialty paper business model includes all necessary measures to improve profitability and thus sustainable competitiveness of the company,” said the business in a statement released today (30 January).
The insolvency proceedings over the assets of Feldmuehle GmbH have also been opened at the Pinneberg District Court this week, in accordance with the management’s proposal, with Penzlin appointed as solicitor.
The process continues to be self-administered by Feldmuehle and the management said they are working on an insolvency plan, which should be implemented by summer 2019.
Based just west of Hamburg, Feldmuehle has a history stretching back to 1904. It became an independent mill again in 2015, after Stora Enso completed the sale of the business to German private equity fund Perusa Partners. The company serves both German and international markets.