Fantuzzi had been looking for new investors since the beginning of the year, when its longstanding debt problems reached crisis point. Initially, the company had hoped to sell real estate to allow it to continue trading under its current ownership. When this deal failed to materialise, the company held talks with investors including privately owned Management and Capitali.
More recently, the company invited interested investors to bid for the firm. A shortlist was drawn up, that included Manitowoc, Terex, Konecranes and Kalmar. Italian newspaper reports now suggest Terex was selected late yesterday, and will sign a deal to buy Fantuzzi, including three factories in Italy, all of its Noell subsidiary’s operations in Germany, and Fantuzzi’s 70% stake in Noell’s Chinese joint venture.
If the deal takes place as expected, it will be Terex’s first involvement in dockside cranes (although subsidiary Terex-Demag was once part of the same group of companies as harbour mobile builder Gottwald).
The Italians problems stretch more than seven years, to their acquisition Noell’s port crane arm and its Chinese manufacturing arm. According to an auditors report in 2002, the company had long term debts of EUR136m, with the bulk of this (EUR128m) due for repayment in 2004, and the last payment due in 2006.
By 2004, however, the company owed a total of EUR369m in bonds and bank debt, and had appointed London and Rome-based lawyers Simmons & Simmons to help it restructure its debts. Simmons & Simmons helped Fantuzzi to reschedule a EUR125m bond deal, dating back to 2001, with bankers JP Morgan. This was only the second bond restructuring deal in Italian history, following a similar successful deal involving Italtractor.
Reports of the value of the bond repayments vary, within EUR5m. The port crane maker paid off the first tranche of the bond, worth EUR35m, in July 2006. The next bond repayment, of EUR40m, came due in 2007, and was paid. The final tranche was due in July of this year, and has been missed. A meeting of Fantuzzi bondholders was due to take place on August 6, to vote on whether to allow the Fantuzzi to extend the repayment deadline until January 2009. However, the meeting did not reach a quorum, and no vote was held.
Fantuzzi embarked on a programme of modernisation at the end of 2006, at the behest of the bankers. Cranes Today spoke to sources close to the deal. The sources explained the restructuring programme started at the request of JPMorgan, in the fourth quarter of 2006. Three people were involved in this programme, including a new CEO, and two managers. The new management team launched a lean manufacturing system and a quality improvement programme.
According to this account, the budget figures improved very fast and in the middle of 2007 the new management team was able to pay back EUR25m owing to JP Morgan. At that point, however, the management team left, amid reports of disagreements with the company’s owners.
Subsequently, there has been criticism of the ownership and management of the company from some quarters, and calls for them to make a clear break with the company. It is expected that, under this deal, Luciano Fantuzzi will cease to be involved with the company’s management. However, the land on which Fantuzzi’s Italian manufacturing facilities are built will continue to be owned by Luciano Fantuzzi’s real estate company.
