Singer Co. NV, the world's largest manufacturer of sewing machines, is seeking bankruptcy protection while it tries to reorganize its troubled operations.
In a statement late Sunday, Singer blamed a decline in the international sewing market and last week's bankruptcy filing by a German subsidiary. Singer's retail and production businesses will continue operating without interruption while it develops a reorganization plan.
The Chapter 11 filing, made in U.S. Bankruptcy Court for the Southern District of New York late Sunday night, includes the parent company, most of the company's U.S. subsidiaries and the holding companies for Singer's foreign businesses.
Hong Kong-based Singer said the filing was precipitated by a lack of liquidity, caused primarily by a recent decline in the global sewing market and the bankruptcy filing on Sept. 6 by German sewing manufacturer Pfaff AG. Singer, which acquired Pfaff last year, is responsible for a portion of Pfaff's debt and is also a creditor of Pfaff.
Singer's president and chief executive, Stephen H. Goodman, also cited the global financial turmoil that has ravaged emerging markets over the past two years, causing an expansion program in countries such as Brazil, China and Vietnam to be "largely unsuccessful."
Singer also has made a $50 million deposit to acquire some Russian assets, a large portion of which has yet to be recovered.
Singer said it has reached an agreement with an unidentified major lender for financing during the company's restructuring. It will be filed with the court this week for interim approval.
Last week, Ontario-based Semi-Tech Corp., which owns about 50 percent of Singer's common stock, filed for Chapter 11 protection, along with two of its subsidiaries. Singer said its own filing this week was unrelated, however.
Singer is the world's leading manufacturer and distributor of consumer sewing machines, with 1,500 retail outlets, 58,000 independent dealers and a sales force of 18,000 in 150 countries. It also makes consumer electronic equipment, furniture and home appliances. Excluding Pfaff, Singer reported a loss of $207 million in 1998 on sales of about $1.26 billion.