German Dormagen Leuna Plant Saved From Shutdown Amid Emergency Joint Acquisition

On April 2, Zhuan Su Shi Jie learned that the factory of DOMO Chemicals, located in Leuna, Germany, will be able to continue its operations. The factory, along with two other German subsidiaries of the group, had entered bankruptcy proceedings at the end of last year.

The provisional insolvency administrator, Lucas F. Flöther, a partner at the law firm Flöther & Wissing, successfully found a buyer for the factory operated by Domo Caproleuna, which employs 436 people. The buyers are InfraLeuna and a special purpose company set up specifically for this acquisition by Leuna-Harze. InfraLeuna is responsible for the infrastructure operations of the chemical park where the factory is located, and Leuna-Harze is an epoxy resin producer in the same park.

"From any perspective, this was a rescue at the last moment under unconventional procedures," Lucas Flöter stated, "The company hardly had any funds to maintain daily operations, and under normal circumstances, the DOMO Caproleuna chemical plant would have had to be shut down as early as January this year. But for practical operational reasons, this could not be carried out: under winter temperature conditions, if the facility is not safely shut down, it will pose an environmental risk."

To this end, Saxony-Anhalt invoked a provision known as "alternative compliance measures," requiring the facility to continue operating in a downgraded emergency mode until the end of March.

The factory, which produces caprolactam, phenol, and polyamide 6, completed its ownership transfer today. Going forward, the company will operate under the name Leuna-Polyamid GmbH.

The acquiring party will take over 436 of the 500 employees in the factory and provide financial support for subsequent production and operations, allowing the state government to terminate its assistance and proceed with the planned withdrawal of alternative performance measures. According to the agreement reached with the employee representatives, the layoffs will be implemented through voluntary departures or the expiration of fixed-term contracts. However, due to operational reasons, the layoff of 39 employees is unavoidable.

This acquisition agreement does not include the group's other plant located in Premnitz, Brandenburg, Germany, which is operated by DOMO Engineering Plastics GmbH and employs approximately 70 people.

The plant will continue operations under the supervision of the insolvency administrator within the framework of the ongoing insolvency proceedings. "Creditors support the company's continued operations, and we are still in talks with potential investors," explained Flött. It is reported that the Belgian parent company is also seeking a buyer for the Premnitz plant's polyamide 6 compounding business. "If a solution can be found for this site, we remain open to it," the insolvency administrator concluded.

The third company to enter insolvency proceedings is DOMO Chemicals GmbH, headquartered in Leuna, which solely performs administrative functions for its three German subsidiaries. Following a transition period throughout April, the company is expected to shut down, resulting in the dismissal of its 35 employees.