- The Group is targeting structural improvements to increase its profitability and generate investment potential for its future
- The German subsidiary is to enter protective shield proceeding to reorganize, streamline its operation, and restructure legacy liabilities; no change in day-to-day activities
- Bondholder vote to be called to amend terms and conditions, including deferred interest payments and allowances for fresh capital
- Principal stakeholders of the company, including shareholders as well as principal bondholders of 3W Power S.A., are supportive of these measures as they serve the future of the Group
- The board has voted to have Klaus Schulze assume the chairmanship of the Group from Dr. Dirk Wolfertz
3W Power S.A. (ISIN LU1072910919, 3W9K), the holding company of AEG Power Solutions Group, announced today that it will realign the Company and focus it further on the core industrial business. As part of the plan, profitability will be increased in Germany. This will be executed under German protective shield proceedings in self-administration for the German subsidiary.
The Group is a leading provider of UPS systems and power electronic solutions for industrial, commercial, renewable and distributed energy markets throughout the world with main sites in France, Spain, Germany, Singapore and China, with further direct 14 sales and service offices worldwide.
Effective and efficient restructuring of German entity under protective shield
The Group has made substantial progress to amend its operational, cost, and administrative structures. However, there are still important steps to be taken to materially improve the Group’s global competitiveness.
As a next step, management and board have decided that the loss-making operations at the German site in Warstein-Belecke are to be further streamlined and legacy liabilities to be restructured. Under German restructuring law, the site is eligible to undertake a so called protective shield proceeding to achieve a quick and efficient restructuring, including of assets and liabilities. This proceeding solely affects the German GmbH. Management expects to conclude this process within six months.
Business activities of AEG Power Solutions and its German subsidiary will continue as usual with no expected effects on customers or projects. Customers will continue to receive high quality, reliable and secure products and efficient services. Warstein-Belecke will continue to be a key site within the Group.
Principal shareholders and bondholders supportive
Bondholders will be asked to consent to certain amendments to holders of 3W Power’s 2014/2019 and 2015/2020 bonds. Requests will include (i) interest payments at the end of maturities, (ii) approval of fresh capital, and (iii) other changes. Principal shareholders and bondholders of 3W Power S.A. support these measures.
Priority is to build on competitive strength in power supply for critical infrastructure
The refocusing of AEG Power Solutions on its areas of competitive strength has been ongoing since 2014. The Group sold non-core product segments such as power controllers, solar monitoring solutions and DC converters. Operations were realigned to best serve AEG Power Solutions’ core industrial markets.
In 2015, the Company had revenues of €169 million in its continued business, 80% of its activities serving traditional industrial markets such as to utilities, transportation, oil & gas, petrochemical, general industry and also data centers. The Group has a unique track record spanning more than 70 years in this core segment and boasts a global customer base.
The group anticipates revenues to be approx. €160 million in 2017 and to grow to towards €180 million in 2018. It maintains its objective to achieve EBITDA margins of 10%, assuming the planned cost savings can be implemented. To effect these changes, up to €15 million of new financing will be required.
Jeffrey Casper, CEO of 3W Power Group, said: “We are not satisfied with the speed of progress in our realignment to date. We are convinced that a quick and effective restructuring of the German site can be achieved. As a result, the basis for a competitive business footprint and future growth both in top-line and bottom-line of our Group will be achievable. In close cooperation with principal shareholders, bondholders and employees, we will enact related necessary changes to our capital structure to facilitate necessary improvements.”
Klaus Schulze to assume chairmanship from Dr. Dirk Wolfertz
Dr. Dirk Wolfertz was instrumental in the first reset of the Group in 2013 and in subsequent years. The Company sincerely thanks him very much for what he has complemented and for his full commitment for success. He remains as one of the members of the board and the second largest shareholder to date. To rotate the burden and privilege of chairmanship in challenging times, the Board, in a meeting on November 21, 2016, voted that Klaus Schulze assume chairmanship of the board from Dr. Dirk Wolfertz.
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About 3W Power: 3W Power S.A. (WKN A114Z9 / ISIN LU1072910919), based in Luxembourg, is the holding company of AEG Power Solutions Group. The Group is headquartered in Zwanenburg in the Netherlands. The shares of 3W Power are admitted to trading on Frankfurt Stock Exchange (ticker symbol: 3W9K). For more information, visit www.aegps.com
