CG: Banks to approve new owner for Belgium entity
Belgium: The Belgium Banks, that hold a pledge on the liquidated CG Belgium business entities, are to approve the bids before the new owners for the Belgium transformer factories and business entities are announced.
The CG Power Systems and CG Holdings business entities were liquidated in February 2020. The liquidation of the Belgium business interests also had an impact on the CG transformer factories in Ireland and Indonesia, which formed part of the CG Power Systems business portfolio.
Efforts to find a potential buyer to ensure the continuation of the Belgium factories directly after the liquidation announcement have not succeeded. It is believed that the outcome of the formal Belgium bidding process containing Bank approval is eminent.
The Belgium factories officially stopped the transformer production with the liquidation announcement in February 2020. Transformer production had already been severely impeded in Q3 and Q4 2019 with substantial delays in order completion and a lack of material supplies brought about by the cash flow constraints.
It is known that a great number of the remaining and unexecuted transformer orders, not cancelled directly after the liquidation, would now be at risk as the ability of a new owner to restart manufacturing, retain critical staff, and capitalise on an existing order book becomes more remote. The ability to secure new orders for Q3 and Q4 2020 with the former customer base will be largely impacted by the choice of the new management team and the financial credentials of the new owners.
It is understood that bids from business entities in Belgium, Saudi Arabia and the Netherlands are currently under consideration.
The CG Power Systems transformer factories in Ireland and Indonesia remained operational following the liquidation of CG Power Systems Belgium entity. A successful bidder and buyer for CG Power Systems Ireland has been announced.
To date there is no announcement on Indonesia.
The CG service business unit in Belgium has been sold. The management buy out (MBO) supported by the Walloon French business development organization in Charleroi will see a continuation of independent service activities from Charleroi without a direct link to a transformer OEM and factory.
Author Chris Gerber
*The opinions expressed in this article are those of the author and they do not necessarily reflect the opinions or views of the Transformers Magazine and Merit Media Int.