May 17 2016
- Insolvency proceedings opened on 1 May 2016
- Metropolitan Equity Partners Management acquires the Wismar plant
- J. Rettenmaier & Söhne takes over the plants in Ettenheim and Herbrechtingen
- Final negotiations with interested parties for the Torgau plant
- The existing team of experts will secure the operations of the US plants
May 1st 2016, at 10.00am, the district court in Schwerin opened the insolvency proceedings over the assets of German Pellets GmbH and other group companies and appointed Bettina Schmudde, an attorney at law and a partner at the law firm White & Case in Hamburg, as insolvency administrator.
On the same day, Bettina Schmudde closed several contracts with investors, which ensure the continuation of significant parts of the Group.
The Wismar site will be taken over by Metropolitan Equity Partners Management, LLC, New York (MEP).
MEP is an active financial investor and has extensive experience in the development of companies. With a new management and together with the experienced team on site, the newly founded Wismar Pellets GmbH will provide a long-term perspective to the business.
Paul Lisiak, Managing Partner from MEP, said:
“We are happy to facilitate an end to a challenging chapter of the wood pellet industry in Germany. MEP and our new management team are dedicated to lead the Wismar plant back to its original promise and capabilities.”
MEP Director Doug Jacobsen, who is in charge of managing the investment for MEP, added:
Name change to Wismar Pellets
“We look forward to the opportunity to re-establish the organic synergies with local business partners in Wismar and the greater Mecklenburg-Vorpommern region. There is a long history for the wood industry in the local area and we expect to drive new growth and build lasting success. Our decision to rebrand the company as Wismar Pellets underlines our dedication to this goal.”
The plants in Ettenheim and Herbrechtingen
J. Rettenmaier & Söhne GmbH + Co KG from Rosenberg, Baden-Württemberg, Germany (JRS).will take over the plants in Ettenheim and Herbrechtingen and continue to operate them.
Josef Otto Rettenmaier, CEO of JRS, is certain:
“Of course our goal must be to preserve the jobs and get the plants up and running again despite the difficult market environment.”
Manufacturing jobs are preserved
In all three locations, almost all manufacturing jobs are preserved. In Wismar, there will be adjustments in the administrative staff.
The closing of these contracts is subject to several conditions. Until then, the businesses will continue under the direction of the insolvency administrator on an interim basis.
The plant in Torgau
Negotiations on the plant in Torgau are still ongoing. “Here we are discussing with various interested parties,” explains Bettina Schmudde who expects an agreement before the end of May.
Ongoing restructuring of the works in the United States
The German Pellets expert team for the US will continue to push forward the pellet projects in the US on the insolvency administrator’s behalf.
“As is known, very large pellet production capacities have been built in Texas and Louisiana. The local companies are currently going through insolvency proceedings under Chapter 11. Together with the lawyers of the US investors who invested about USD 550 million in those companies, they are working on sustainable restructuring and continuation solutions.”
“The negotiations concerning the acquisition of the Belgian coal power plant Langerlo in Belgium by a new investor will continue with the involvement of the Belgian Government.”
About German Pellets
The German Pellets Group was a major participant in the wood pellet and animal hygiene industry and produced with around 650 employees in Germany, Austria and the USA wood pellets and animal bedding products based on wood from renewable resources.
Since mid-February 2016, German Pellets GmbH and eight other group companies have filed requests for opening of insolvency proceedings.
In the meantime, insolvency proceedings against the assets of German Pellets GmbH and other companies have been opened (see also: https://german-pellets.insolvenz-solution.de). Investors are expected to take over the plants in Wismar, Ettenheim and Herbrechtingen. For the other plants, the insolvency administration is in takeover talks.
About White & Case
For more than 30 years, White & Case Insolvenz GbR has been one of the leading insolvency law practices in Germany operating nationwide. The company is part of the global White & Case practice. White & Case LLP is a leading international law firm present in the World’s key economic centres at 39 locations in 26 countries.
About German Pellets
German Pellets mit seinen 18 Produktionsstandorten ist einer der weltgrößten Hersteller von Holz-Pellets. Der Wismarer Konzern ist mit rund 420 Millionen Euro verschuldet, mehr als die Hälfte davon aus Anleihen. Dem Unternehmen ging es nach eigenen Angaben gut, im vergangenen Jahr lag der Gewinn bei rund 38 Millionen Euro. Im Stammsitz in Wismar sind 150 Mitarbeiter beschäftigt, insgesamt sind es über 600.
About JRS, J. RETTENMAIER & Söhne Group,
We, JRS, J Rettenmaier & Söhne Group have dedicated ourselves to research, development and processing of high quality organic fibers derived from vegetable raw materials. We make many features of these valuable natural substances available for industrial purposes.
JRS is a leading international pulp producer with plants in Europe, America and Asia, employing approximately 2 000 people worldwide.
Metropolitan Equity Partners Management LLC (“MEP”) is an alternative investment manager that provides transition and expansion capital to growing private companies in the lower middle market. MEP focuses on complex transactions in capital intensive businesses where it can add value via its network of experienced managers to catalyze a company’s transition to its next stage of development.
The takeover by MEP of production at the Wismar plant has ensured its continued operation and the survival of the majority of jobs at the production plant. MEP is confident that in the future, Wismar Pellets will play a positive role in the wood industry in Wismar and the economic region of Mecklenburg-Vorpommern.