New owner poised to purchase DME
Receiver says buyer intends to continue Charlottetown operation as a going concern
The receiver for Diversified Metal Engineering (DME) released its second report, which says there is a purchase agreement with a potential buyer who plans to continue the business as a going concern. That deal includes work for current and possibly past employees.
DME is a P.E.I.-based company that builds brewing systems for the craft beer industry and stainless steel products for other industries.
It went into receivership Nov. 26 after the Royal Bank reported the company had defaulted on payment.
The purchase agreement is with a Dutch company, CIMC Enric Tank and Processing Ltd.
According to its website, CIMC Enric Tank and Process Ltd. is a subsidiary of CIMC Enric Holdings Limited, which "is engaged in the design, development, manufacturing, engineering and sales of … a wide spectrum of transportation, storage and processing equipment"
The receiver's report says there were four bids for DME's Charlottetown operation. After analyzing those offers, the receiver found the bid from CIMC to be best, for reasons that include purchase price, the proposed time to complete the transaction and future employment opportunities for former employees.
Sale still needs court approval
If the sale is approved, CIMC would acquire DME's properties in Charlottetown as well as the company's machinery, equipment, inventory and client list.
The receiver also states CIMC intends to continue to employ the majority of DME's current employees and will consider rehiring a number of former workers.
The company's Charlottetown operation had 150 employees. The first receiver report said about 50 staff members continued to work at that location after the receivership order, to finish outstanding projects and orders.
Last month, the courts approved the sale of DME's Abbotsford location as well as an Island-based subsidiary company, Atlantic Systems Manufacturing (ASM).
Set to close in 2 weeks
Last week the new owners of ASM — Eastern Fabricators — were in the building getting it ready to go back into production and some employees had returned to work.
DME has been in business for 27 years. At the time it went into receivership, court documents showed the company owed just over $27 million dollars to the bank and other creditors.
The report states the closing date for the sale of DME Charlottetown is set on or around March 5, but the purchase agreement still needs to be approved by the courts. The documents indicate the next court date is Feb 22.
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