The executive management board of Papersystems Holding, and affiliate companies ECH Will and Kugler-Womako, filed for protective shield proceedings, a German version of the US Chapter 11 proceedings, on 28 June 2013.
This allows a company to create a sustainable business plan with the goal of restructuring the business while maintaining self-administration. This will create the necessary conditions for the company to successfully continue its business in the future.
The management board will continue to be responsible for all three companies. Detlef Specovius has joined the management as a restructuring expert, and the district court has appointed lawyer and tax consultant Berthold Brinkmann to preside over the procedure as a preliminary trustee.
A new concept to restructure the company has already been pre-agreed with the staff, the works' council and trade union. Alexander Wassermann, CEO of ECH Will holding company Papersystems, explains: "Our objective is to use the benefits of the protective shield proceedings and the support of our shareholders to emerge from this situation as quickly and as successfully as possible. We are convinced that Papersystems, ECH Will and Kugler-Womako can be restructured in a very short period for a solid, long term future."
While the group's service business is continually growing, since mid-2012 there has been a drastic slump in the new machine business of ECH Will reflecting the global stagnation in the graphic paper market and the economic slow-down in Asia. Kugler-Womako is financially healthy and profitable; due to a pooled financing model, it is unwillingly forced to file for protection under the shield.
This is not the case for Papersystems' third subsidiary - US-based Pemco, which is profitable, financially independent and therefore not affected by these proceedings.
All of the companies will remain fully operational. Customers and suppliers have been informed. Payment of wages and salaries during the proceedings is ensured.
ECH Will has been a leading supplier of machines and systems for the paper manufacturing and processing industry since 1866. It has 239 employees in Wedel (Germany), Kugler-Womako has 105 in Nürtingen (Germany) and Pemco 139 in Sheboygan, Wisconsin.
