Norwegian furniture maker Hjellegjerde, which has been on the verge of bankruptcy, was offered NOK 20 million in fresh share capital from furniture store chain Interstil but its future remains unclear. Even though a majority of shareholders accepted the offer, Interstil didn’t get the approval rate it wanted.
Interstil sweetened the offer it made for the firm last week in return for full control, but existing shareholders would have to take heavy losses and their stakes would be diluted.
Interstil’s proposal has been the only one on offer. A majority of the shareholders had decided to accept its terms by Tuesday afternoon but Interstil was demanding 67 percent. The offer was only valid through Tuesday and when it ran out at midnight, less than 67 percent had accepted, reports Norwegian Broadcasting (NRK).
Hjellegjerde, based in the mountain community of Sykkylven, employs 385 people, 71 of them in Norway and the remainder in Lithuania and Thailand. “Hjellegjerde has been an important employer in Sykkylven for 60 years and 70 jobs mean a lot in our small community,” the town’s mayor, Jan Kåre Aurdal, has told reporters. Local residents have been fearing a bankruptcy of Hjellegjerde all summer.
The Hjellegjerde family, which has held a major stake in the furniture maker, had expressed support for Interstil’s offer. “We’re glad the company can avoid bankruptcy, secure jobs and make sure creditors get their money back,” Rolf Hjellegjerde, eighth-largest shareholder, told newspaper Dagens Næringsliv (DN) before it was known that not enough shareholders accepted Interstil’s bid.
After a day of lengthy meetings with Hjellegjerde chairman Lars Buer, and suspension of the company’s shares on the Oslo Stock Exchange, he decided to accept Interstil’s offer, along with two other large shareholders within the Hjellegjerde family, even though the family knew little about what plans Interstil has for the company.
On Wednesday afternoon it was unclear whether Interstil would make a new offer, or whether the furniture maker would cease operations.
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