Business News

Banks agree to support schlott gruppe

Tuesday 01. February 2011 - schlott gruppe will be able to continue trading during the preliminary insolvency proceedings. Following negotiations lasting several days, the insolvent group's banks and the provisional administrator Siegfried Beck have now reached agreement on a special loan similar to debtor-in-possession financing.

This gives Beck the capital needed to maintain the group’s business operations for the foreseeable future, i.e. beyond the opening of insolvency proceedings at the beginning of April, and time to work with schlott gruppe’s management board on a possible rescue package for the printing and media group.
In his comments at the end of the negotiations, Beck noted that the willingness of the banks to provide additional cash in this difficult situation “demonstrates their confidence in the future of the group and sends a clear signal to potential investors.”
Beck also arranged for short-term financing of support funds provided under Germany’s insolvency law, so that all 1,500 German employees can receive their January pay packages over the next few days. Altogether, the insolvency support funds are sufficient to pay wages and salaries up to and including March. Last Wednesday the preliminary administrator held a meeting with the full works council of schlott gruppe in order to keep it informed about the state of the proceedings and the next steps.
In the meantime, two of the group’s international subsidiaries have also filed for insolvency. These are hollmann S.A., a post-press company based in Hambach/France with around 130 employees, and the Swedish distribution company schlott försäljning Aktiebolag, based in Stockholm. The District Court of Nuremberg, which has jurisdiction in the insolvency of the group as a whole, has also appointed Beck as the preliminary administrator for these two companies so that the case can be overseen by a single person.
So far, support for the group from its customers has been very positive. Thomas Voigt, Director of Economic Policy and Communications at the Otto Group, observed: “We have had great confidence in schlott gruppe for many years and are sorry to hear about its current troubles. At present, there is no risk of it losing print orders from us as long as it can remain operational. As a major customer, we would like to continue working with schlott gruppe.”