Sievi Capital Plc
Inside information 9 December 2022 at 2:00 pm EET
Inside information: Sievi Capital’s target company Nordic Rescue Group’s subsidiary ceases the manufacturing of rescue lifts
Sievi Capital Plc’s target company Nordic Rescue Group’s (“NRG”) subsidiary Vema Lift Oy has filed for bankruptcy at the District Court of Southwest Finland. NRG’s other Group companies Saurus Oy and Sala Brand AB will continue their business operations as before.
The underlying reasons for the bankruptcy filing are Vema Lift’s prolonged financial difficulties, the difficult market situation in China, the company’s former main market, the shortage of chassis and components and inflation developments.
Vema Lift Oy has been a part of NRG since 2020. At that time, the Chinese export market was in good shape, and it looked like it would continue to bring a necessary and growing volume to the company’s operations, but the coronavirus crisis and the preference for domestic production in China forced Vema Lift to change its strategy and focus on other export markets.
The largest creditor of Vema Lift’s bankruptcy estate is Nordic Rescue Group. Sievi Capital owns 68.1% of Nordic Rescue Group.
“Vema Lift’s management and entire personnel have done a very good and uncompromising job in the exceptional operating environment. Unfortunately, there are no signs of improvement in the market situation. Together with our advisors, NRG was also looking for a new owner for Vema Lift as we estimated that the company would have benefited from the broader shoulders and more extensive networks of a globally operating industrial owner. Unfortunately, such a solution could not be found – when the market situation is difficult for everyone in the industry, the realisation of acquisitions is also challenging,” says Esa Peltola, NRG’s CEO.
NRG will continue to develop and grow the operations of the other two group companies, Saurus Oy and Sala Brand AB, as before. Both companies have conducted their business independently. Both Saurus and Sala Brand have profitable business operations and strong market positions.
Due to the operations of Vema Lift having been loss-making, NRG’s management estimates that the bankruptcy will have a positive impact on NRG’s debt service capacity. As Vema Lift's financial performance has been weak, NRG did not meet the financial covenants set out in its financing agreement as of 30 September 2022. NRG has received the consent of its financing provider to deviate from the covenants set out in its financing agreement as at 30 September 2022, and the financing provider has waived its right for mandatory repayment due to the bankruptcy of Vema Lift.
Sievi Capital will assess the value of its NRG holding in connection with the Financial Statements Release for 2022.
SIEVI CAPITAL PLC
Jussi Majamaa
CEO
FURTHER INFORMATION:
CEO Jussi Majamaa, tel. +358 400 412 127
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www.sievicapital.fi/en/
Sievi Capital is a partner for Finnish entrepreneurs. We support the growth, performance and value creation of small and medium-sized companies and concurrently build national competitiveness. We believe that we succeed together as co-entrepreneurs. Sievi Capital’s share is listed on Nasdaq Helsinki. Read more at www.sievicapital.fi/en
