A majority ownership stake in NFM Technologies is to be sold to Chinese firm Shenyang Heavy Machinery Group (SHMG) in a move that will help recover the fortunes of the French TBM and industrial manufacturer, which has been under commercial court protection since late 2005.
SHMG is the French firm’s partner in China and has agreed to buy a 70% holding in NFM for US$26.6M. The remaining 30% will stay with Wirth Holding Group, which is led by Niko Kleuters, giving the Germany-based company more than minority stake status under German law. The deal, which is scheduled to be ratified by the commercial court on 27 July, is subject to prior satisfactory legal consultations with NFM’s creditors on a proposed three-year debt settlement plan.
NFM’s recovery strategy calls for the cash injection to help settle its debts and move to a more active business stance so that, by mid-2010, it can exit the protection of the commercial court. It sought legal protection after cashflow problems were brought on, it said, by a client in Tabriz, Iran, not paying a US$20M order placed in 2004 for two TBMs, which NFM built and paid its suppliers.
When the client in Tabriz failed to pay, NFM kept the twin 6.88m Ø EPBMs in storage and only recently – following receipt of payment in 2006, some two years late – were the shields dispatched. A spokeswoman for NFM said the firm had previously worked successfully in Iran, supplying machines – also a pair of 6.88m Ø EPBMs – to Shiraz (T&TI, March, p8), and hence the non-payment problem was unexpected, she said.
NFM’s last major order in Europe was a 9.93m hard rock single shield TBM for the Pajares project. As the company moves to recover its financial health on the continent – still with production facilities in Le Creusot and Lyon, and with the same leadership team, as agreed with SHMG – it expects to be active in Spain and elsewhere. Farther afield, but outside China, it sees opportunities in India and Turkey.
Before its financial difficulties, NFM was becoming active in China, and was establishing a strong working relationship with SHMG, she said. In total, the JV partners are building seven TBMs for Chinese projects and also have two machines currently driving tunnels – the pair of 11.38m Ø slurry TBMs at Wuhan. NFM will make the cutterheads and motors.
This year, NFM anticipates revenues of around US$160M, about 90% coming from its tunnelling activities. This would beat its previous result of US$93M with about 80% from tunnels.
