Walter Bau To Restructure
01 May 2008
German Contractor Walter Bau has unveiled a restructuring plan that will see it cut costs by between €40 to €60 million, and sell a range of businesses.
The announcement follows on from the company's attempt to fully acquire Züblin late last year, which is thought to have been blocked by its banks due to liquidity concerns.
Walter Bau has long held a 48% share in Züblin. In November last year it acquired a further 5%, with a view to acquiring the remaining 43% by the end of the year. However, the deal is though to have stalled due to the reluctance of Walter Bau's banks.
Walter Bau depends on some €1,5 billion of loan guarantees from a syndicate of 27 creditor banks, but this facility expires in June. The company's restructuring plan is part of the company's strategy to gain an extension to this facility.
Under the plan, Walter Bau will sell Dywidag Systems International (DSI), its profitable building technologies division, which has annual sales of €300 million. It will also cut down its Turnkey Construction and Construction Germany businesses from €900 million a year to €700 to 750 million.
It will seek to expand its Civil Engineering and Infrastructure Construction divisions into countries neighbouring Germany, and will also look to grow its German—managed International Division, which operates in Eastern Europe, the Middle East and Australia.
Overall Walter Bau will cut around 400 jobs from its headcount of 2400 employees, and reduce turnover from €2,8 billion to €2,4 billion. It maintains that it has not abandoned plans to acquire Züblin, but this seems a distant prospect at present.