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© anton-andronov-dreamstime.com Electronics Production | January 07, 2014

AEG puts Lannion site into administration

AEG Power Solutions will focus their business on core areas in order to stem decreasing revenues. In this process, the Group will close its Lannion site in France.
To face the challenges raised by the decrease in revenue and losses in operations, AEG Power Solutions have decided to focus their business on their core areas of competitive strength. In this process, the Group is readjusting its footprint and has decided to place in liquidation its entity in Lannion (France), which can no longer be financially supported.

The AEG PS Group experienced close to 11% decrease in revenue from 2011 to 2012, and is expecting another decrease by 25% in 2013 as announced in its Q3 interim management report. The Group EBITDA was down 66% in 2012 compared with 2011 and as announced in the interim Q3 report, losses are expected for 2013.

To secure the business, AEG Power Solutions must adjust its structure to fit within its financial capabilities and is forced to close its business in Lannion (France) which was structurally losing money.

Lannion’s management has announced the local works council its intention to file for bankruptcy protection for the entity. The group cannot support the losses of Lannion nor finance the cash flow required to run the entity which would be EUR 6 million for the first half of 2014.

Lannion’s cumulated losses (EBITDA) over 5 years have reached EUR 27 million, out of which EUR 11,1 million over the last 2 years. Up to now, these losses have been fully supported by the Group.

Though it is clear that AEG Power Solutions cannot finance any initiatives proposed by the bankruptcy court, the Group will consider every possibility to redeploy employees from Lannion in other entities if competencies match future needs. AEG PS will allow any intellectual property rights linked to the Lannion business to contribute to selling of assets.

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