The insulation material manufacturer Brucha, based in Lower Austria, was declared bankrupt on Wednesday. The company has approximately 500 employees and offices around the world. An application was made for a self-governing restructuring process: the approximately 700 affected creditors should receive a 30 percent quota.
The company, based in Michelhausen in the Tulln district, has been producing insulation materials for industrial and commercial buildings for 75 years. According to Creditreform, the company operates three business activities: the production and sale of insulation panels, modular cold and freezer rooms and PS insulation panels. According to the AKV, Brucha has branches worldwide. However, sales are made from Austria and Germany.
In the event of liquidation, the free assets would amount to 34.4 million euros, against which there would be 75 million in debts, reports Creditreform. The company values the freely available assets at 17.4 million euros as part of a theoretical break-up scenario and at 18.9 million euros based on the book values as of December 31, 2023, the KSV announced. The debts are valued at 74.2 million euros. The presented asset status shows that the AKV has identified approximately 59 million euros in debts, of which, according to its own information, approximately 20.6 million are outstanding.
This post shows the business premises from above:
Brucha would stick to unprofitable areas
The insolvency was the result of several factors, Creditreform reported, pointing to incorrect investment decisions, mainly due to unrealistic market assessments and poor profitability calculations, which retained unprofitable business units and branches despite persistent losses; and inadequate financial planning and monitoring. This led to a worsening of liquidity problems and ultimately to insolvency and over-indebtedness. Creditors are offered a restructuring plan with a quota of 30 percent of their claims, payable within two years of acceptance.
According to the KSV, the causes of the bankruptcy according to the company’s own statements include poor investments in mechanical equipment, high cross-subsidies at sales companies in the US, Singapore and Switzerland, calculation errors on major projects and millions in expenses due to complaints and damages to recover. Discussions with banks and potential investors failed.
The slide into bankruptcy is attributed to the poor market situation and the lack of a sales structure in Switzerland, which was subsequently closed, the AKV writes. In addition, there were also sales losses at the branch in the US, but also in Singapore due to Corona-related access restrictions. In addition, the decline in the number of bankruptcies is attributed to complaints and repair damage, increased energy costs and the increase in raw material prices.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
