Damen challenges Rheinmetall’s Mangalia deal at 75% of start

Damen Holding BV challenged Rheinmetall’s €138 million purchase of Romania’s Mangalia shipyard after the German group won an Oct. 9 tender, a Romania Insider trade-press report said on Tuesday.

The dispute matters because the €138 million sale price was 75% of the original €184 million starting price, a reduction approved after earlier tenders failed to draw buyers, the report said.

Damen, the shipyard’s former operator and its main creditor, is contesting the court ruling that allowed the auction price to be lowered during the sale procedure. Rheinmetall won the tender after four earlier attempts to sell the asset were unsuccessful, according to the report.

The filing, as described by News.ro and cited by Romania Insider, argued that the court’s use of price-reduction rules was wrong after recent legal changes. “The law no longer refers to the maximum 12-month period for the sale of assets, and the notion of a ‘reasonable period’ remains undefined,” the document said.

Rheinmetall announced on Monday, Oct. 19, that it plans to turn Mangalia into a production site serving military and commercial needs in partnership with Swiss shipping company MSC. “Following the acquisition, we plan to expand and upgrade the shipyard comprehensively,” Tim Wagner, chief executive of Rheinmetall’s Naval Systems division, said in the announcement cited by Romania Insider.

The procedural fight turns on how quickly and at what price the shipyard could be sold. Judicial liquidator CITR asked the insolvency judge on May 14 to approve the use of Civil Procedure Code provisions that permitted the lower price, the report said. Damen filed a separate request hours later proposing six monthly auctions without reducing the starting price.

The Creditors’ Meeting approved the liquidator’s approach, even though Damen holds 70% of total claims, according to the report. After three tenders under that strategy failed to attract a buyer, the insolvency judge allowed the price cut and Rheinmetall won the fifth tender.

Representatives of the 2 May naval shipyard, a Romanian state-controlled company that owns 51% of Damen Mangalia, accused Damen of delaying the sale, the report said. They said Damen could attend creditor meetings on the sale strategy but was absent or opposed the plan, and argued that debts accumulated during bankruptcy reduce creditors’ recovery prospects.

The legal challenge leaves uncertainty around the sale process just as Rheinmetall is outlining plans for the site in south-eastern Europe. The Constanța Tribunal is scheduled to examine Damen Holding BV’s challenge to the sale procedure on Nov. 4.

The Nov. 4 court record should show whether Damen’s objections to the reduced-price auction process advance or are rejected. Any ruling or procedural step will be checked against Rheinmetall’s Oct. 19 plan to develop Mangalia as a dual-use production center with MSC.

Source: trade-press report, Romania Insider, Oct. 20.