Press maker manroland has initiated insolvency proceedings and named a provisional administrator after negotiations with a potential investor failed.

A petition filed today initiates insolvency proceedings with the Augsburg district court. Key units to be restructured as “debtor in possession”, the company says.

At the same time a request for self-administration has been made “in order to finalise on-going restructuring efforts”.

“Provisional insolvency administrator Werner Schneider will in due course examine the situation at manroland, in order to obtain a comprehensive picture of the situation,” a statement says.

“The executive board of manroland aims to rescue key units within the framework of ongoing restructuring efforts as debtor in possession. The insolvency procedure affords the opportunity to step up the restructuring process. Despite all the disappointment over the path that now has to be taken, the insolvency procedure as debtor in possession offers plenty of prospects because the company has compelling products, the necessary know-how, and an excellent team. With the planned entry of a potential investor and on a basis of a financing program coordinated with the previous shareholders and banks the company’s equity base would have been strengthened.”

It says the decision to file for insolvency was triggered by another dramatic downturn in incoming orders since mid-July which has recently accelerated. “Although there is still great interest in manroland’s printing systems, customers are finding it far more difficult to obtain financing in the aftermath of the financial crisis. At the same time, intensive competition in the face of declining orders has led to even greater pressure on prices and therefore to declining contribution margins. The market size is now only at 50 per cent of the level before the beginning of the crisis in 2008. After showing initial signs of recovery from the beginning of the fiscal year and well into the summer, the market took another downturn, particularly in the USA and Western Europe, and in the segment for sheet-fed presses. The same goes for activities in China, although business there remains brisk. This downturn had an impact on the entire industry, the force of which was not foreseeable. The general representative and the provisional insolvency administrator are now going to promptly review the possibilities for a restructuring.

“Currently, the business activities of manroland continue to run as normal.” manroland employs 6500 people, 5000 of them in Germany.

• The past couple of weeks have seen not only unconfirmed reports of  the negotiations which would have seen manroland bought by a German engineering company, but another which claims the US Securities and Exchange Commission is not planning to take action against part-owner Allianz SE over matters concerned with its private equity investments in Indonesia and Germany.

News agency Reuters said Europe’s largest insurer had been under investigation for alleged corruption at a joint venture in Indonesia and at a German printing equipment maker it owns through a private equity arm.

It quoted spokesman Michael Matern confirming discussions with the SEC “on a settlement” and saying it was policy to fully cooperate with authorities. “In the meantime we took the proper consequences in order to avoid such misbehaviour (happening) again,” says the report.

Reuters says that while the Indonesia case is likely to be settled in coming weeks, German ownership laws make it unlikely that action will be taken in relation to the private equity holdings.

On November 16, the news agency – quoting ‘Handselblat’ – reported that manroland “may be on its way to getting a new owner soon”, quoting two people “familiar with the plans”.

A spokesman for MAN, which still owns a 23 per cent share of the company, said talks were going on with Allianz Capital Partners and manroland regarding “a long-term solution”. Allianz has declined to comment.

Options discussed in the ‘Handselblat’ report include full or partial takeover of manroland by a major European engineering company, “not yet active in the printing machine segment”.

MAN said it would continue to assist its former subsidiary.

At a press conference at IfraExpo in October, manroland chief executive Gerd Finkbeiner discussed the volatile market of recent weeks with journalists: “This industry needs courage,” he says.