New owner poised to purchase DME

The receiver for Diversified Metal Engineering (DME) releasedits second report, which says there isa purchaseagreement with a potential buyer who plans to continue the business as a going concern. That deal includes work for current and possibly past employees.

DME is a P.E.I.-based company that builds brewing systems for the craft beer industry and stainless steel products for other industries.

It went into receivershipNov. 26 after the Royal Bankreported the company had defaulted on payment.

The purchase agreement is with a Dutch company, CIMC EnricTank and Processing Ltd.

According to its website, CIMC EnricTank and ProcessLtd. is a subsidiaryofCIMC Enric Holdings Limited, which "is engaged in the design, development, manufacturing, engineering and sales of a wide spectrum of transportation, storage and processing equipment"

The receiver's report saysthere were four bidsfor DME'sCharlottetown operation. After analyzing those offers, the receiver found the bid fromCIMC to be best, for reasons that include purchaseprice, the proposed time to complete the transaction and future employment opportunities for former employees.

Sale still needs court approval

If the sale is approved, CIMCwould acquire DME's properties in Charlottetown as well as the company's machinery,equipment, inventory and client list.

The receiveralso states CIMC intends to continue to employ the majority of DME'scurrent employeesand will consider rehiring a number of former workers.

The company's Charlottetown operation had 150 employees. The first receiver report saidabout 50 staff members continued to work at that location after the receivership order,to finish outstanding projects and orders.

Last month, the courts approved the sale of DME's Abbotsfordlocation as well as an Island-basedsubsidiary company, Atlantic Systems Manufacturing (ASM).

Set to close in 2 weeks

Last week the new owners of ASMEastern Fabricators were in the building getting it ready to goback into production and some employees hadreturned to work.

DME hasbeen in business for 27 years. At the time it went into receivership, court documents showed the company owedjust over $27 million dollars to the bank and other creditors.

Thereport states the closing date for the sale ofDME Charlottetown is set on or around March 5, but thepurchase agreement still needs to be approved by the courts. The documents indicate the next court date is Feb22.

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