After more than a year Tadano has acquired Demag from Terex, the Japanese crane manufacturer has filed to protect its entire German operations from bankruptcy to enable restructuring.
Demag was losing €4 million a month under Terex ownership when Tadano acquired Demag for €215 million in August 2019, merging Demag management with its own German operations, Tadano Faun GmbH. the subsequent impact of the COVID-19 pandemic on the mobile crane market has proved an additional challenge to turning around the business.
“Tadano Demag GmbH and Tadano Faun GmbH have decided after careful consideration and in close alignment with the parent company Tadano Ltd to file for protective shield proceedings. The applications were filed with the District Court of Zweibrücken on 8th October 2020.Jens Ennen, Tadano Demag chief executive, in a letter to customers
“The ‘Schutzschirmverfahren’ (protective shield proceedings) is a German judicial restructuring procedure and provides companies in distress with a chance to stabilise themselves while staying in control of their operations,” he explained. “These protective shield proceedings are a particular type of self-administration aimed at producing a restructuring plan. During this phase some temporary regulations come into effect to make it easier for the company to reorganise.”
He continued: “Tadano Demag and Tadano Faun have been confronted with shrinking markets and mounting competitive pressure for some time. The resulting economic challenges have escalated considerably in recent months due to the Covid-19 crisis and cannot be sufficiently mitigated, despite short-time work and other measures taken. A reorganisation of Tadano Demag and Tadano Faun is essential to ensure the future viability of the companies.
“Business operations continue under the prerequisite of the protective shield proceedings. Accordingly, you can rest assured that our cooperation will continue as reliably and smoothly as ever. Production at Tadano Demag in Zweibrücken and at Tadano Faun in Lauf an der Pegnitz is ongoing, all existing and new orders are being fulfilled under the prerequisite of the protective shield proceedings. The familiar contact persons are on hand to assist our customers, business partners and suppliers as usual.”
Restructuring lawyer Martin Mucha from the firm Grub Brugger is to be appointed as general representative to support the companies through the protective shield proceedings.