Chesco firm sold, exits Chapter 11
Drilling rig maker Schramm completes asset sale process
WEST GOSHEN >> Chester County drilling rig maker Schramm Inc. has been sold following its June filing for Chapter 11 bankruptcy protection.
The newly formed Schramm II Inc. (“Schramm”) has completed its purchase of substantially all of the assets of Schramm Inc., through a sale conducted under section 363 of the U.S. Bankruptcy Code.
Schramm will now operate outside of Chapter 11 protection and claims it is in “a strong financial position, able to support future growth,” according to a press release. As part of the Section 363 sale, all assets, operations and employees of Schramm Inc. have been transferred to the new operating company, Schramm II Inc., which will continue to operate under the “Schramm” name.
Gen Nx360 Capital Partners, a private equity firm, now fully owns Schramm II Inc. and has secured access to additional funding for future growth, the company said.
Schramm Australia, which was not part of the Chapter 11 process, was purchased as part of the acquired assets and continues to operate as usual as a wholly-owned subsidiary of Schramm.
“We’re excited about the future of Schramm and the opportunity to build on Schramm’s proud 119-year history of American manufacturing, innovation and customer service,” Craig Mayman, chief executive officer of Schramm, said in the release. “With a much stronger balance sheet, access to additional funding, supportive partners and our dedicated team of employees, we are now well positioned to execute our growth strategy focused on leveraging our large, global installed base of drilling rigs to drive after-market parts and service sales.”
Asked how it is now “well positioned” to execute its growth strategy, the company responded that it has sold drilling rigs in several different market segments globally, which remain very active in drilling. This “installed base” of drilling rigs creates demand for spare parts and services that will be the focus of the new Schramm moving forward, the company said in an emailed response to questions.
Mayman added that the company’s “more efficient” approach to supply chain will enable Schramm to be more agile in responding to market and customer demands.
Through the bankruptcy process, the company contacted 161 potential interested parties, and engaged in due diligence with a number of them, according to Mayman. At the end of the 75-day process, the
Bankruptcy Court approved the sale agreement with Schramm II as the highest bid offer for the assets, and the transaction was completed on Oct. 3.
Schramm employs 40 people at its West Goshen facility and another 60 in Australia. According to Mayman, there have been no layoffs at the company.
“Actually, Schramm II extended offers of employment to all then-current employees of the old Schramm. And we anticipate growth in the future,” the company’s emailed response stated.
Schramm Inc. and its parent company HDR Holding Inc. filed papers in the U.S. Bankruptcy Court for the District of Delaware on June 24. In the original filing made by Schramm Inc. and Mayman, the company claimed it owed $20 million in secured debt.
The company claimed it has faced “significant challenges” over the past three to five years as oil and gas producers curtailed or ceased drilling new wells.
Schramm was founded in 1900 in the West Chesterarea by Chris Schramm and originally manufactured engine driven machinery and portable air compressors, according to information on the Schramm website. Today, the company supplies products to the hydraulic drilling industry and specializes in hydraulic drilling rigs used in mining, oil and gas, and water markets.
In 2010, Schramm received international attention when it supplied equipment used in the rescue of 33 Chilean miners trapped nearly 2,041 feet underground for more than 69 days after the walls of the mine collapsed according to the Schramm website.