Court approves DME sale to Dutch company
March 5 set as closing date for Island company’s sale to CIMC Enric Tank and Process Ltd.
A P.E.I. court has approved a motion that will allow a Dutch company to proceed with an agreement to buy Charlottetown’s Diversified Metal Engineering.
The motion to allow the sale agreement to proceed between the receiver Alvarez and Marshal and the Dutch company CIMC Enric Tank and Process Ltd. was approved last Friday in the Supreme Court of P.E.I.
CMIC designs and manufactures tanks and process equipment for the beverage, brewery and food industries.
According to court documents, a closing date has been set for March 5 or a later date if approved by the parties. Other details of the Feb. 13 agreement include the acquisition of DME’s Charlottetown buildings at 54 Hillstrome Ave. and 38 McCarville St., as well as the acquisition of all machinery, equipment, inventory, intellectual property and warranty rights relating to purchased assets. CIMC is not assuming any of DME’s liabilities.
Court documents further say that CMIC plans to continue to operate the business as well as “continue the employment of the majority of current employees and consider re-hiring a number of former employees.”
The purchase price was not included in the court documents.
DME went into receivership in November after a court order by the applicant — the Royal Bank of Canada — was approved. RBC, the secured creditor, was owed $18.1 million.
It was later revealed that DME owed $27 million to several unsecured creditors, including approximately 50 P.E.I. businesses. Earlier this year, the company’s assets were valued at $71.7 million.
The DME Group is comprised of DME Limited Partnership, DME General Partnership Inc., Atlantic Systems Manufacturing (2016) Ltd., DME Canada Acquisitions Inc. and DME US Holdco Inc.
DME Charlottetown is one of three divisions of the DME Group.
In January, the sale of another division — Atlantic Systems Manufacturing (ASM) — was approved to a newly formed company, 11223143 Canada Inc. That company involves an ownership group that includes Todd Cormier of Eastern Fabricators.
The sale of a third division — DME’s Abbotsford, B.C. plant — was also approved in January. The Abbotsford transaction was a liquidation services agreement with Infinity Asset Solutions Inc. and Joiner Sales Corp. The liquidation auction was set to begin Feb. 27.