pdn news march 11,2009
http://www.pdnpulse.com/2009/03/medium-pan...insolvency.htmlQuote; British Journal Of Photography
(Last week, the Germany-based company announced that it is going into administration after being unable to pay its bills.
Franke & Heidecke develops products for the legendary Rolleiflex twin-lens camera system, plus it produces a 6x6 camera for both Sinar and Leaf, which respectively market it under the Hy6 and AFi product names.
Many are now asking how this will affect Sinar and Leaf – especially as the two are currently in talks about co-distribution. Talking to BJP, a spokeswoman at Sinar says that the Swiss-family business, which is owned by German manufacturer Jenoptik, is closely monitoring the situation. 'We are still receiving cameras,' she says. 'Production has not shut down and we will be looking at what is going on and what alternatives there are [in case the firm does go under].'
Leaf, also contacted by BJP, has released a statement to reassure its customers that its camera system is still and will continue to be available. 'Leaf management is in constant communication and working closely with Jenoptik and Franke & Heidecke management. They are updating us frequently as the story unfolds,' the statement says. 'Regardless of any rumours in the industry, the Franke & Heidecke manufacturing plant is operating normally and will continue to operate while Franke & Heidecke works with their creditors to reach agreement on the best way forward. While this process advances, production of Leaf AFi parts and components continues. To further ensure that Franke & Heidecke continues operating efficiently, an interim administrator has been appointed to evaluate the Franke & Heidecke business. What this means is that we will continue delivering Leaf AFi-II camera systems, lenses and accessories.'
Leaf adds that, in parallel to the actions being taken by Franke & Heidecke, it 'is investigating all possible opportunities to ensure that Leaf can achieve its goals. This effort includes urgent work with Jenoptik, F&H, our sales managers and dealers worldwide.
The financial troubles at Franke & Heidecke comes six months after the firm partnered with Hans R Schmid Beteiligungs to finance an increase in its production of camera systems and lenses, after being forced to seek new investment. However, by January this year the company appeared to be running into trouble after it announced that its chief executive officer would leave the company following disagreements with the new partner, who had become the majority shareholder as part of the investment deal.
'In view of different views regarding past and future policies and cooperation with the new partner Hans R Schmid, Mr Bodo Fischer offered his resignation from the management of Franke & Heidecke, an offer that was accepted by the company,' Franke & Heidecke said in a statement.
Now, in a new statement, the company says it is being forced into administration. And, if the statement is to be taken at face value, Schmid is blameless:
‘For majority shareholder Hans R Schmid, a devoted supporter of the company’s products, who had described his commitment as a matter of personal importance, there was no alternative to filing for insolvency any more. Although it had already been obvious at the time of the take-over that a successful restructuring would cost substantial effort, Schmid accepted the responsibility and acted determinedly. Additional specialists were employed, weak points in the company were examined and millions were invested, et al, in production and quality management. Due to these measures quick progress could be made, however, the massive failures of the past could not be resolved in the required time.’
The second half of the statement is more ambiguous, insinuating that there were hidden debts, and perhaps hinting at the real reason for Fischer’s departure: ‘When recent financial and other old liabilities turned up, which had not been known to the new shareholder at the time of the take-over, it became evident that a financial reorganisation would not be possible even by investing further millions.’
It adds that ‘negotiations with important business partners, banks and the attempt to obtain public funds failed’, and ends with the suggestion that Schmid invested at least €10 million into the business: ‘In spite of considerable risk of loss the new shareholder invested repeatedly until the very end and has preserved the company and the hope to maintain 131 jobs for a long time. Now the insolvency could not be avoided any longer. In total Schmid invested millions in the two-figure range.’
Franke & Heidecke started producing the 6x6 medium format camera in May 2007 under the impulsion of Jenoptik, Leaf and Sinar. The 'open' digital platform initiative came after Hasselblad's decision to ensure that its H3D camera body is not compatible with anything except Hasselblad digital backs (BJP, 18 October 2006).
The development of the camera was, at first, largely financed by Jenoptik, which hoped to recuperate by 'franchising' the camera to Leaf, and by distributing it through its own daughter company, Sinar.
BJP will continue to monitor the situation as it unfolds.
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