Worker Representatives of Insolvent Tissue Specialist CEL and Lucart Strike Deal

The works council of the financially troubled Spanish tissue specialist CEL Technologies & Systems (CEL) and Italy’s Lucart Group have come to an agreement over the future working conditions for the CEL workforce. The deal is one of the pre-requisites for the closure of the potential takeover of CEL by Lucart.

According to the trade union Euskal Langileen Alkartasuna (ELA), the agreement was adopted in a general assembly held on November 20, during which 150 people voted in favor of the agreement, 15 voted against it and 10 abstained. The agreement includes the termination of 35 contracts, amendments to the current collective agreement and substantial modifications of the previous working conditions. According to ELA, the salaries and wages of 80% of the remaining workforce will be cut by around 9%, while those of the rest will be reduced by 20%.

CEL’s management submitted a redundancy scheme in August which provided for the closure of three production sites and the elimination of more than 230 jobs. According to ELA, the CEL management was seeking the closure of the group companies Ecofibras Aranguren, Celulosas Aranguren and CEL Technologies & Systems Issue. Only the group company, Dermo Products Development, was supposed to keep operating.

CEL was approached by several parties interested in a potential takeover of the firm. Earlier this month RISI learned that Italy’s Lucart submitted the winning bid, which however still needed the green light from the works council, CEL’s insolvency administrator and the insolvency court.

The agreement between the worker representatives and Lucart was submitted to the court on Tuesday. If the court approves the agreement following a five-day appeal period, the transfer of CEL’s productive units to Lucart can proceed. This will involve a Euro 7.8 million ($9.3 million) payment from Lucart, which includes the offer price of Euro 6.3 million, Euro 2 million in compensation and a Euro 0.5 million deposit. The deal is currently expected to close by the end of the year.