COMPANY NEWS Austrian tunnel group emerges from crisis13 Mar 2013
Peter Kenyon, TunnelTalk
Troubled construction group Alpine, parent company of wholly owned subsidiary BeMo Tunnelling, is expected to finalise within days a "restructuring agreement" that will secure its future as one of Europe's leading civil contractors.
Company spokesman Johannes Gfrerer told TunnelTalk: "Alpine will still be active in the tunnelling business in future. Underground construction is definitely considered a core business and in Alpine BeMo Tunnelling the Group has a company with an excellent international reputation."
Beleagured Alpine appointed a Chief Restructuring Officer, Josef Schultheis, in November last year (2012), to manage the growing financial crisis which was threatenening to break Austria's second largest construction company. By February 28, the date a previously negotiated "standstill agreement" between Alpine and its creditor banks expired, Alpine had secured support for its restructuring plans from most of the creditor banks but the necessary loan agreement from the Austrian Government's Ministry of Finance had not been finalised.
Now, following what Alpine called "talks of maximum intensity," the Ministry has agreed to guarantee those loans.
Alpine has tunnel projects around the world
The agreement ends several months of uncertainty, and is a reward for extensive negotiations between Alpine, its sole owner FCC Constrruccion of Spain, and Erste Bank and UniCredit Bank of Austria. As part of the deal FCC injected more cash into the company, the banks waived some of their claims, and Alpine has begun the process of raising cash by selling off some of its subsidiary companies, including Alpine-Energie and Hazet.
The company, which employs about 15,000 people worldwide, is also to focus on its core markets in Austria, Germany and the Czech Republic and abandon its projects in south and eastern Europe.
An Alpine spokesman said: "The general tone of the financing partners is that the restructuring concept makes economic sense and insolvency should be avoided. The concept envisages getting Alpine back in the black and enabling the long-term continuity of the company."
Alpine is currently involved in a number of underground projects (Fig 1) including Singapore's Down Town Line and tunnels for Germany's Stuttgart-21 project. It is involved in construction of the new Kaiser Wilhem tunnel, and it is part of the JV that will excavate the Whitechapel and Liverpool Street Station tunnels under Crossrail contract C510. The company was famously lead partner in the SAHEC joint venture that completed the world's record 25.4km distance heading for a single TBM as part of China's massive Yellow River Project.
Josef Schultheis (left) and new CEO Arnold Schiefer
In the first half of 2012 Alpine reported in its interim report a net loss of €1.47 million on sales of €1.43 billion. Civil engineering makes up nearly half of the business, with the Austrian and German markets accounting for nearly two-thirds of all activity.
Alpine crisis timeline
12 Jan 2012
New CEO, 50-year-old Austrian Johannes Dotter, appointed.
7 April 2012
CEO outlines a "Program of the Future," based on a focus on core markets and priority of margin over sales.
2 August 2012
Alpine announces "satisfactory" results for first half of 2012 in the core markets of Germany, Austria and the Czech Republic in a difficult market environment."
14 October 2012
Alpine forced to make a clarification statement after the 2012 financial position was questioned. Alpine says it would in fact have made "a substantial loss" but for the development of certain projects, and discussions are held between Alpine and its sole shareholder, FCC "to discuss all the measures necessary to restore a sound financial position."
17 October 2012
FCC makes a commitment to financial support to allow Alpine to negotiate with its creditors a long-term restructuring and refinancing solution.
18 October 2012
Baldomero Falcones, President and CEO of FCC, and President of the Alpine supervisory board says: "It was Johannes Dotter's personal decision to leave the company."
13 November 2012
"Standstill Agreement" reached with financing partners, with FCC again guaranteeing the reorganisation process with additional short-term financial support. The company says in a statement: "Alpine will sell assets to actively reduce the debt situation. A long-term refinancing concept will be mutually prepared with the banks in the next few months. Alpine's strategic reorientation will primarily concentrate on the profitable core business and consequently the discontinuance of unprofitable projects in central and eastern Europe. The entire reorganisation process will be accompanied by efficiency programmes."
29 November 2012
Alpine appoints a new Chief Restructuring Officer, Josef Schultheis (47), to manage the changes and broker agreements with creditors. Alpine says in a statement: "Schulteris will be in charge of taking the necessary steps to put the company back on a steady, successful course."
1 February 2013
Negotiations reported to be constructive, with an announcement made that financing partners agreed with the concept that restructuring was the best way forward and that insolvency should be avoided.
28 February 2013
"Standstill Agreement" expires, but Austrian and international banks agree to support the restructuring for as long as the negotiations continue. Talks continue with "maximum intensity" to broker a loan guarantee deal with the Austrian Government.
3 March 2013
Austrian Government agrees to loan guarantee: "A vital condition for the group's going concern has been met." Formal signing of the agreement expected to take place "within days".
7 March 2013
Arnold Schiefer, a director with Rail Cargo Austria and a former Austrian Federal Railway (OBB) interim board member of the Brenner Base Tunnel, appointed new CEO of Alpine with effect from April.
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