Electronics Production | February 01, 2012
Cencorp ends temporary layoffs in Finland
Cencorp ends temporary layoffs affecting all employees in Finland; renews financing agreement with Ahlström Capital and continues negotiations on the sale-leaseback of the Beijing facility building.
Due to the brighter market outlook, particularly in the North American markets, Cencorp has decided to end the temporary lay-offs that started in September of 2011 and affected all of the companys employees in Finland. Cencorp estimates that the Group's order book will develop favorably in the coming months. The company is also seeking to increase its investments in product development, especially in the area of renewable energy technologies. In June 2011 Cencorp agreed with AC Finance BV, a subsidiary of Ahlström Capital Oy, on a short-term loan of EUR 1 million. The loan period was extended at the turn of the year from December 2011 to 31 January 2012. Cencorp and AC Finance BV have now agreed to extend the loan maturity date until 30 June 2012. Cencorps Chinese subsidiary Savcor Face (Beijing) Technologies Co., Ltd has negotiated with real-estate investors on a sale-leaseback transaction regarding the plant building in Beijing. The transaction has not yet been finalized, but in the light of currently available information, the company expects it to be realized before the end of the first quarter. The intention is to use the sales price to repay the Bank of China a loan of RMB 40 million, i.e. some EUR 4.9 million. Negotiations with the Bank of China continue, including on amending the loan installment program. According to available estimates, the companys financing position will continue to be tight. In addition to the measures described above, the company has therefore started discussions with its major financiers and shareholders on measures to strengthen the financing position until the companys cash flow is expected to return to positive.