In a statement issued on Friday, the German printing press manufacturer confirmed that it had been forced to initiate insolvency proceedings following a "dramatic downturn in incoming orders" since mid-July.
Click here for the story from Manroland Australasia.
The company has filed a request for self-administration in order to finalise its on-going restructuring efforts as a "debtor in possession", while court-appointed lawyer Dr Frank Kebekus will act as general representative for the restructuring.
Werner Schneider, a financial auditor and tax consultant, has been appointed as provisional insolvency administrator and is expected to examine the situation at the company "in due course".
In its statement, Manroland said that it would aim to rescue key units within the framework of its ongoing restructuring efforts, which have seen it cut staffing from 8,656 in March 2009 to 6,500 at present. Additional cuts were already due to take staffing to 6,000 by the end of 2012.
The company said: "The initiated insolvency procedure affords the opportunity to step up the restructuring process and guide the company through this difficult phase. Despite all the disappointment over the path that now has to be taken, the insolvency procedure as debtor in possession offers plenty of prospects because the company has compelling products, the necessary know-how, and an excellent team.
"With the planned entry of a potential investor and on a basis of a financing program coordinated with the previous shareholders and banks the company’s equity base would have been strengthened.
"The decision to file for insolvency was triggered by another dramatic downturn in incoming orders which can be noticed since mid-July and has recently accelerated. Although there is still great interest in manroland’s printing systems, customers are finding it far more difficult to obtain financing in the aftermath of the financial crisis.
"At the same time, intensive competition in the face of declining orders has led to even greater pressure on prices and therefore to declining contribution margins. The market size is now only at 50 percent of the level before the beginning of the crisis in 2008.
"After showing initial signs of recovery from the beginning of the fiscal year and well into the summer, the market took another downturn, particularly in the USA and Western Europe, and in the segment for sheet-fed presses. The same goes for activities in China, although business there remains brisk.
"This downturn had an impact on the entire industry, the force of which was not foreseeable. The general representative and the provisional insolvency administrator are now going to promptly review the possibilities for a restructuring. Currently, the business activities of manroland continue to run as normal. manroland employs 6,500 people, thereof 5,000 in Germany."
Manroland posted an operating loss of €25m ($34m) for the six months to 30 June 2011, down from a €46m loss in the first half of 2010. Sales and incoming orders were both up at €435m (2010: €405m) and €520m (2010: €458m) respectively.
This article originally appeared at printweek.com
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