DME receiver negotiating with potential buyer, new documents reveal
The receiver for Diversified Metal Engineering (DME) released its first report on the company's future, which indicates the receiver is negotiating with a potential buyer.
DME is a P.E.I.-based company that builds brewing systems for the craft beer industry. It also makes stainless steel products for other industries.
The receiver, Alvarez & Marsal, was called in by the Royal Bank of Canada and appointed by the Supreme Court of P.E.I. on Nov. 26 after the bank reported the company had defaulted on payment.
The report says the receiver was accepting bids for the purchase of DME assets earlier this month and there were three bids for the company's Charlottetown operation.
The receiver determined one of those bids was better than the others because of, "purchase price, closing risk, available financing and employment opportunities for retained and former employees."
Other deals in the hopper
The report does not name this bidder or provide any further details of the offer, but does say the receiver is now exclusively looking at this bid and plans to continue negotiating a purchase agreement.
The report also says the receiver is in discussions with a bidder for the assets of Atlantic Systems Manufacturing (ASM). ASM is a subsidiary within DME which manufactured equipment for the seafood processing industry. The reports says the subsidiary had 13 employees and has not been in operation since the company went into receivership.
The receivership also includes DME's location in Abbotsford B.C. The report says two companies, Infinity Asset Solutions Inc. and Joiner Sales Corp. made a joint offer to purchase and liquidate those assets. The receiver is asking the court to approve that deal.
The Abbotsford plant employed 100 people and has not been operating since the receivership. The liquidation sale is expected to be complete by Mar. 31. according to the document.
Some Charlottetown employees stayed on
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 company's Charlottetown operation had 150 employees. The report says about 50 staff members continued to work at that location after the receivership order, to finish outstanding projects and orders.
The report says all purchase agreements have to be approved by the courts. The receiver previously stated it hoped to sell the business as a going concern.
There are no details about if or when a purchase may happen or what that could mean for the future of the company here on P.E.I.