After a strategic review of the business by its Board of Directors, Shanghai Prime Machinery announced a possible plan to shut down one manufacturing plant in Berlin.
The plant based in Berlin is a smaller factory along with the other one, both owned and operated by Nedschroef Fraulautern GmbH, which is Shanghai Prime Machinery's direct and wholly-owned subsidiary. The planned restructuring could permanently shut down the Berlin plant and lay off all employees there, and transfer existing business and assets to Shanghai Prime Machinery's other specific manufacturing plants in Europe.
Based on the BoD's preliminary assessment, the restructuring is estimated to generate EUR 6.2 million of one-off cost, including the indemnity of EUR 4 million for layoffs, expenditure of EUR 1.5 million for reinstalling specific machines, and other mediating and assorted expenses calculated as of December 31, 2019. Shanghai Prime Machinery expects to initiate the planned restructuring and complete it by the 3rd quarter of 2020.