Corporate News

Jürgen F. Kullmann, sole member of the Executive Board of ALEXANDERWERK AG, expects the restructuring to deliver considerable success, especially on the operational side

Remscheid, January 14, 2010 – Jürgen F. Kullmann, sole member of the Executive Board of ALEXANDERWERK AG, envisages significant success in the restructuring of the Remscheid-based specialist for the development and production of machines and systems for the chemical, pharmaceutical and food processing industries, especially on the operational side. Only the sustainable, fully secured comprehensive financing, has not yet been completely obtained. The balance sheet of the first few months of his term of office therefore allow Mr. Kullmann to feel cautiously optimistic. In detail, the situation presents as follows:

Inquiries and order pipeline
The development of the operative business has generated sufficient financing for Alexanderwerk. The good results in the USA in 2009 also contributed to the fact that Remscheid remained liquid for the time being until March 2010, even without a state guarantee.

Hierarchy level has been completely eliminated
As part of the streamlining of the organization, a no longer required hierarchical level below the Executive Board has been eliminated.

Reduced consulting scenario
Consulting expenses will decline as planned. After the first quarter of 2010, they are expected to be reduced by 50%. However, consulting services are currently still necessary. IG Metall and the works council also incur consulting expenses.

Renovation measures on the loss-making machines of FoodTec GmbH
In the meantime, restructuring measures and the installation of the new management have set FoodTec GmbH on track to no longer generate losses from March 2010 onwards. The move to more affordable premises with more efficient production will be completed in February 2010.

Financing and State guarantees
The application for a guarantee was submitted in close coordination with the state of North Rhine-Westphalia and the auditors of PricewaterhouseCoopers AG. The corresponding statement of the Chamber of Industry and Commerce was positive, that of IG Metall negative. However, the planned committee hearing (December 17, 2009) could not take place as scheduled, as it became clear on December 16, 2009, that the state of Baden-Württemberg would deviate from the original arrangement of a counter-guarantee to the state of North Rhine-Westphalia and now required a completely separate guarantee procedure for the permanent establishment in Baden-Württemberg with 30 employees. For the company, this means:

• The difficult phase in terms of liquidity will be extended until the hearing of the Guarantee Committee on January 21, 2010.
• The entire restructuring project is delayed.
• Alternatives to the state guarantee and a capital increase are currently being examined.

Still no negotiations with the workforce and the IG Metall trade union
The trade union and the works council continue to be much more cautious with regard to restructuring than the current situation mandates in the company's assessment. In addition, our social partners have consulted with external consultants, which has resulted in unproductive delays in the full implementation of the restructuring concept.

Risks of insolvency not yet averted
Since, contrary to expectations, the financing by means of the state guarantee has not yet been secured at this point in time due to the state’s new requirements, the latent liquidity risk still remains. Indispensable for securing the financing are active waivers by commercial agents, contributions from the workforce and robust commitments from the main shareholders and banks. Without secured financing and a noticeable, rapid willingness to negotiate and compromise on the part of IG Metall and the works council, a classic restructuring will not be possible. However, despite the current crisis, it should be noted that the operative business is sufficiently resilient and that business operations are running at an acceptable level despite the lack of financing. Accordingly, the restructuring efforts are continuing.