DyStar future clearer in November21 October 2009
A final decision regarding the future of German based chemical and dyestuff maker, DyStar will become clearer by the end of November say the company’s liquidators.
‘Staff wages are currently being paid by the German government agency for labour under the terms of the insolvency’, said Gabriele Wunnenberg, media officer for Waggener Edstrom Worldwide who represent Dr Stephan Laubereau the preliminary insolvency administrator of DyStar Textilfarben GmbH & Co. Deutschland KG. ‘At the end of November responsibility for workers wages will revert back to company and they will have to bear all the costs. Then the future of the business will be clearer’, she told Leather International. Laubereau of law firm Pluta Rechtsanwalts are the preliminary administrators for DyStar’s production sites located in Ludwigshafen, Leverkusen, Brunsbüttel and Geretsried.
Currently all employee jobs and salaries are secure, including the leather chemicals division located in Geretsried, up until the end of the end of November and all previously owed salaries have now been paid.
Since the business became insolvent procedures under German law mean that three separate administrators are handling different preliminary insolvency aspects of the business. Other administrators include Miguel Grosser of lawyers Jaffe Rechtsanwalts for DyStar’s supply, distribution and headquarters: DyStar Textilfarben GmbH. A third administrator will handle DyStar Holdings GmbH.
A media representative for Grosser has confirmed to Leather International that they are in talks with potential investors but could not say whether the business will be sold as a single entity or as individual business units.
‘Negotiations are at an early stage’ said Laubereau in a separate press release dated October 15.
Further details emerged in the press release that DyStar have began production again in Geretsried and Ludwigshafen as their cash-flow situation has improved since the business went into administration on September 28. Banks and secured creditors have accepted a proposal from the administrators to keep the business going for the time being.
It is confirmed that the DyStar sites in Leverkusen and Brunsbüttel are stopped at the moment due to ‘energy supply issues’. Deliveries to customers recommenced on October 12 from the other sites.
It is now understood that problems at DyStar became evident earlier this year when the company had difficulty with cash-flow and liquidity which included paying for utility bills.
The administrators are now looking through the business and it is not clear whether it will be sold as a single unit or broken up and sold separately. This could mean that the leather chemical unit, formerly known as Dr Th Böhme, located in Geretsried may be sold off.
To further complicate the situation DyStar’s manufacturing plant in Leverkusen houses dyestuff manufacturing equipment not located elsewhere which they also process for other leather chemical producers.
Leather International has also been told that the company pension fund was also a problem for DyStar, which it has inherited from former incarnations of the business.