Italian blow molding machinery maker Techne SpA filed for protection from creditors Oct. 15 and missed exhibiting at K 2010 in Germany but CEO Moreno Minghetti said the company is talking to new investors.
Techne got caught in a financial squeeze, when it was slammed by the sharp recession after making major investments to build a factory and develop new equipment, including its high-output Advance and very large Rotax wheel machines, he said.
We are in the final negotiation with international companies listed on the stock market, who are then entering in participation as [Techne] shareholders, Minghetti said in a Nov. 12 telephone interview. The firm expects to have all final documents signed by year's end, he said. He declined to name the shareholders, identifying them only as industrial packaging companies.
Techne stopped taking orders and down payments for new machines around March of this year, as the firm faced a liquidity crisis, Minghetti said. But the company, based in Castel Guelfo di Bologna, Italy, continues to serve existing global customers, who together run more than 1,000 Techne machines, he said.
We are open. We supply service to all our machines. We supply spare parts. The commercial department is open because we are explaining the situation to our customers, he said.
Techne Technipack Engineering Italia the legal name of Techne SpA filed for protection from creditors in the Court of Bologna, just 11/2 weeks before the K show, held Oct. 27 to Nov. 3 in Dusseldorf, Germany.
Techne had taken out a large booth at K, and was planning on bringing machinery. About two months before K, Minghetti said, Techne officials contacted show organizers and asked for a smaller booth because the firm did not want to bring equipment. He said that request was refused.
At Messe Dusseldorf, the Techne space in Hall 14 was turned into a rest area, filled with tables and chairs.
I had no choice. I'm protecting the company's life, he said.
According to the court filing, the worldwide economic crisis at end of 2008 dried up incoming orders. The value of production fell by more than 44 percent in 2008, and the contraction of demand became more severe in 2009, court documents said.
Minghetti said sales fell 42 percent, from 33.7 million euros in 2008 to 19.4 million euros ($27 million).
Techne had invested about $5 million between 2004 and 2007 to develop the Advance, a high-output machine that shuttles mold clamps between a single, stationary extrusion head, then moves them away for blow molding. Techne introduced the Advance at NPE2009 in Chicago, billing it as an alternative to long-stroke blow molding machines.
Techne also spent about $15 million to build a 100,000-square-foot factory in Bologna that replaced four older buildings. The plant opened in September 2008 just as Lehman Bros. filed for bankruptcy in the United States, lighting a fuse that spread to a financial crisis.
It was just the wrong timing, Minghetti said.
Techne's bank refused to extend financing, he said. As soon as the banks began to balk, he said, Techne officials notified customers that the company could have problems if the overall machinery market collapsed. I chose to be transparent, he said. We kept everyone crystal clear.
After losing financing, Techne was unable to buy materials, which led to the decision to stop taking orders for new machines.
Under Italian law, Techne could not lay off any of its 85 workers. Payroll and other fixed costs coming as orders declined dramatically were a major drain, and the company lost close to 9 million euros ($12.5 million) in 2009, Minghetti said.
The Italian machinery executive stressed that Techne was hurt by the financial crisis not by any problems with its equipment or technology. Techne delivered machines up to mid-2010.