The future of the financially strapped Franco-German metal group Recylex is tightly linked to the fate of the German subsidiary Weser-Metall GmbH and its lead smelter in Nordenham, Germany. "Recylex S.A.'s capacity to sustainably pursue its activities is dependent upon Weser-Metall GmbH’s capacity to continue its own activity as well as to continue sourcing secondary materials from Recylex S.A.," said the parent company on Wednesday evening. Weser-Metall GmbH is Recylex SA's largest customer.
However, there is now no longer anything Recylex can do to influence Weser-Metall. With the insolvency of the German sub-group, the parent company has lost all control over its German subsidiaries.
German subsidiaries deconsolidated
Recylex SA report that the insolvency court in Göttingen has confirmed the opening of the "protective shield" procedures for Weser-Metall GmbH, Harz-Metall GmbH, Norzinco GmbH and PPM Pure Metals GmbH as well as the "self-administration" procedures for Recylex GmbH, C2P Germany GmbH and Recylex Grundstücksverwaltungsgesellschaft mbH. The parent company now definitely loses control of the German entities "leading to the deconsolidation of the entire German perimeter", according to the Wednesday statement. Recylex SA stresses that its French holding are entirely outside the scope of the insolvency proceedings.
As Recylex emphasized when it announced the application for insolvency proceedings last week, the aim of the protective shield proceedings was the to continue both the operation of the businesses and their individual restructuring processes.