DOMO Chemicals Germany: Plants go into emergency operation
Negotiations with creditors for a short-term mass loan have failed
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Production at the German sites of DOMO Chemicals must be shut down with immediate effect and put into emergency operation. The background to this is that negotiations with the creditors for a short-term mass loan have failed. Without the financial means to finance business operations, the provisional insolvency administrator Prof. Dr. Lucas F. Flöther is forced to shut down operations immediately.
Without the financial means to finance business operations, the provisional insolvency administrator Prof. Dr. Lucas F. Flöther is forced to shut down the company immediately.
Flöther & Wissing
"The account balance of the insolvent companies is close to zero and the prospect of urgently needed interim financing has been dashed today," explained Flöther. "This means that we unfortunately have to activate plan B, which we have been preparing with the management over the last few days. The top priority now is to continue to guarantee plant safety." Flöther informed the employees and the relevant authorities immediately after the failure of the financing talks.
The provisional insolvency administrator had been negotiating intensively with the creditors over the last few days. This involved the release of seized accounts by the creditors as so-called "mass loans" in order to enable business operations to continue at least until the end of the month. This release can only take place if all participating security creditors unanimously agree. "We fought for this until the very end, but unfortunately we were unable to achieve this unanimity among the creditors," says Flöther.
The consequences for the plant and its liquidation cannot yet be assessed. "We are supporting the management in shutting down the plants safely. The big question is whether they can then be restarted and used again at some point without damage," says Flöther. "That would certainly be a disaster for the plants and the chemical site, but also for the creditors."
The three German subsidiaries of the DOMO Chemicals Group filed for insolvency on December 25 after talks on further financing at Group level failed. The insolvency proceedings concern DOMO Chemicals GmbH (Leuna, approx. 35 employees), DOMO Caproleuna GmbH (Leuna, approx. 480 employees) and DOMO Engineering Plastics GmbH (Premnitz, approx. 70 employees). Other companies in the DOMO Group are not affected.
DOMO Caproleuna manufactures organic base products (e.g. caprolactam, phenol, acetone) and polyamide 6 as its main product, also known as nylon 6. Polyamide 6 is a versatile engineering plastic characterized by high strength, good toughness and very good processability. It is used in the automotive industry, the electrical and electronics sector and in high-quality consumer goods for lightweight, durable and high-performance components.
DOMO Engineering Plastics in Premnitz also produces polyamide 6 and compounds, i.e. engineering plastics in which polyamide 6 is specifically combined with additives. This allows properties such as strength, heat resistance, rigidity or impact resistance to be precisely adjusted. Such compounds are mainly used in the automotive, electrical and consumer goods industries.
The administrative functions of the three German companies are bundled in DOMO Chemicals GmbH
Note: This article has been translated using a computer system without human intervention. LUMITOS offers these automatic translations to present a wider range of current news. Since this article has been translated with automatic translation, it is possible that it contains errors in vocabulary, syntax or grammar. The original article in German can be found here.
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