spruecutter96 Posted March 23, 2018 Share Posted March 23, 2018 Hello. A couple of months ago, I read on BM that Hobbyco (Revell's parent company) had filed for bankrupcy in the US. Last week I read something that implied that Revell Germany are in financial trouble (on here as well, I think). Does anyone any up-to-date information on this situation? Cheers. Chris. Link to comment Share on other sites More sharing options...
PhoenixII Posted March 23, 2018 Share Posted March 23, 2018 Hi Chris, Hobbico have now filed for bankruptcy. Revell De. being a wholly owned subsidiary are an asset and as such will be sold for the highest price possible, be that as a whole or as a sum of parts. If U.S. law is anything like ours, any and all moneys raised will go to the receivers who will then enter into talks with the creditor(s). There's an awful lot of people who are going to feel a very cold wind blowing, not least of which will be the employees. Here you go, last post was three days ago, nothing further to report. Paul 1 Link to comment Share on other sites More sharing options...
tempestfan Posted March 23, 2018 Share Posted March 23, 2018 I asked a friend recently who has good contacts to Bünde, and he said they were still making profits. Looks like ( another) Management Buyout scenario to me. In any case, it would be good if in the event of a sale, the plastic modelling companies were sold as a bunch. 1 Link to comment Share on other sites More sharing options...
Gary C Posted March 23, 2018 Share Posted March 23, 2018 It's being auctioned off from Monday. Seems like there's a fair bit of interest. http://www.news-gazette.com/news/local/2018-03-13/hobbico-hopes-find-buyer-auction-set-march-26.html Link to comment Share on other sites More sharing options...
PhoenixII Posted March 23, 2018 Share Posted March 23, 2018 Hi tempestfan, firstly I don't know either U.S. or German law. The following is my personal take. Revell De. may be making a profit, BUT, a management buy out will still involve an awful lot of money, and that would be for Revell De. as a single company. If you're thinking of Revell plus Monogram plus Revell De. my view is that's a non starter. Both the Revell (US) and Monogram names are assets, as is each individual mould. It's my understanding that the moulds are somewhere in the far east. If the company that is holding them is owed money, I don't think they'll give them up unless they see a substantial amount of money. From the little I've read, it seems that debts are up to five times the value of assets. Somebody really took their eye off the ball, maybe even the park! Paul 2 Link to comment Share on other sites More sharing options...
Giorgio N Posted March 26, 2018 Share Posted March 26, 2018 On 23/3/2018 at 10:40 PM, PhoenixII said: Hi tempestfan, firstly I don't know either U.S. or German law. The following is my personal take. Revell De. may be making a profit, BUT, a management buy out will still involve an awful lot of money, and that would be for Revell De. as a single company. If you're thinking of Revell plus Monogram plus Revell De. my view is that's a non starter. Both the Revell (US) and Monogram names are assets, as is each individual mould. It's my understanding that the moulds are somewhere in the far east. If the company that is holding them is owed money, I don't think they'll give them up unless they see a substantial amount of money. From the little I've read, it seems that debts are up to five times the value of assets. Somebody really took their eye off the ball, maybe even the park! Paul If the company is profitable, the management will have no problem in finding the money, Revell Germany already went through a management buyout in the past and another one would be quite feasible. This of course for the German side of the business, that in any case has always operated independently and have actually been separated by Revell US before with no big problem. Really as a modeller based in Europe my interest would be mainly in what the German side can do, Revell US had been little more than a name for decades anyway. if we want to see new tools in the future, it's Revell.de that matters. Things will of course be different for our American friends, but I'm sure someone will buy the US side of the business as well Link to comment Share on other sites More sharing options...
PhoenixII Posted March 26, 2018 Share Posted March 26, 2018 5 hours ago, Giorgio N said: If the company is profitable, the management will have no problem in finding the money, Revell Germany already went through a management buyout in the past and another one would be quite feasible. This of course for the German side of the business, that in any case has always operated independently and have actually been separated by Revell US before with no big problem. Really as a modeller based in Europe my interest would be mainly in what the German side can do, Revell US had been little more than a name for decades anyway. if we want to see new tools in the future, it's Revell.de that matters. Things will of course be different for our American friends, but I'm sure someone will buy the US side of the business as well Hi Giorgio, possibly! with a large inward investment. Since the '08 debacle, the banks will put the directors through 'hoops'. That's applicable Europe wide. Feasible? again quite probably, BUT, if there is no one large inward investment, by an individual or a company giving them a 50%+ holding, and by default the running of the company, the bank(s) will be the major shareholders, and therefore running the company on a day to day basis. Having been on the receiving end of a 'Bank run' business, it would give you nightmares. e.g. there is a maximum daily spend, and if that exceeds an agreed amount per day (nominally £250 - £500 [300 - 650 euro]) it's on the banks say so, and if there is the slightest doubt the answer will be NO!, Non, Nein. Great if the company spends a small amount per day, but put the initial outlay for one new mould into that equation, or new boxes for a re-run of say 1000 units, or a batch of new or reprint decals or a reprint of instruction sheets...................... Revell De. or if you prefer Gmbh. is a wholly owned subsidiary of Hobbico Inc. a US company, and as such will rise or fall with the parent. Having read what has been published, particularly from Revell De. my take is the directors of the German arm are doing a fair imitation of an Ostrich, which in the short term, may steady the market, but the long term prognosis remains the same, just because you can't SEE the claws and fangs it doesn't mean their not there. Put simply, money rules. The major problem is that the German arm of the company is NO LONGER a 'stand alone'. They have an allocated 'pot' of money from H/O to invest where they think is best, with a 'watch' from company H/O in the US. As has already been pointed out, Revell De. seems to have been aquired as an established European company, and a ready 'gateway' for Hobbico into the wider European market. It may well be that the problems have occured in the US, BUT, the outcome for the WHOLE is still the same, and that is to obtain the maximum amount possible for every and all assets. Remember, the 'receivers' aren't bothered WHAT they sell, just that they get the MAXIMUM for it, be that from another model oriantated company or the scrapman. We are modellers, with memories of what it was like in years gone by, and by nature, we think that the company makes just to keep us happy! Yeah, RIGHT!! The company in charge of the sale is NOT looking backwards, there are no 'rose coloured glasses', no 'well, back in the day' thoughts at all, it's just about cold hard CASH. The business we're talking about didn't go into the manufacture of 'kit's' on a whim, or out of the goodness of their hearts, remember, it was seen as a pretty good way of making money, END OF. The only light this can be seen in is a Global one, not by Country or even old versus new world. Revell Inc. based their European arm in Germany, it could have been any number of other Countries, from Austria to Eire or Switzerland to Sicily. End of the day, and taking one item from the list of assets, if there is a suitable offer made for ALL of the moulds, that's US produced or German production, or any that have been purchased through the years from companies that have changed direction, or possibly ceased trading, by your friendly local scrap merchant, guess who will own the Revell and Monogram legacy. We all hope and trust that the sale is a success, not least of all for all of the employees, they just want to keep the job their in. The foregoing is my take, and mine alone and at the end of the day, so much hot air, because WE DON'T KNOW! Paul 2 Link to comment Share on other sites More sharing options...
VMA131Marine Posted March 26, 2018 Share Posted March 26, 2018 I think I should point out what's really going on here. The parent company, Hobbico has filed for Chapter 11 bankruptcy which gives it protection from creditors to restructure its debt and operations. In this case, the company has determined that selling the company as a whole or in pieces is the best strategy for preserving the value of the business. Hobbico is currently owned by its employee stock ownership plan (ESOP) which is call the debtor-in-posession. There are no third party receivers/liquidators involved at this point. The ESOP currently has debts of over $100 million and the assets of the company are estimated to be around $50 million. Revenue in 2017 was around $110 million. In selling the businesses, the ESOP is trying to raise as much money as possible to pay back its creditors and this is the purpose of the auction this week (this is now scheduled to be held in Delaware on Wednesday). The sale is subject to approval from the bankruptcy court and if not approved would lead to liquidation of the businesses. Upon completion of the auction and closing of the sale(s) the proceeds go to the Hobbico ESOP to be distributed to the creditors according to the seniority of their debts. In this case, Hobbico also used as much as $72 million in debtor-in-possession financing to keep operations going and this has priority over all other claims. Whatever assets remain (unsold businesses, orphaned brands, real estate, etc) will then be liquidated and the bankrupt Hobbico ESOP will be wound up. The businesses that were sold continue on free of the debt obligations of the parent company. Note that the employee "owners" have the lowest priority on claims to the proceeds of the sale of the company; it is very likely that the value of their stock will be entirely wiped out. This could be a significant fraction of their retirement savings. At the moment, there are announced stalking-horse bidders (who set a floor price at the auction in return for some financial compensation in the event they don't win) for the radio control brands and distribution businesses of Hobbico as well as the model rocket company Estes. There are no announced stalking-horse bidders for Revell USA or Revell Gmbh, but this does not mean that there will not be bidders during the actual auction. My assumption is that both companies operate as separate P-and-L (profit and loss) centers of Hobbico and operate mostly independently but pay a management fee to Hobbico plus some fraction of their profits and in return benefit from common HR, payroll, and accounting functions. The reasonable assumption is that the two Revell's are worth more as going concerns than if their assets (brand identity, kit molds, etc) were sold off separately, which would happen in a liquidation. It goes without saying that neither Revell USA, nor Revell Gmbh can survive unless a buyer comes forward. 1 1 Link to comment Share on other sites More sharing options...
Julien Posted March 26, 2018 Share Posted March 26, 2018 There is a thread in the rumour section which has been linked to. Link to comment Share on other sites More sharing options...
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