Leading scrap merchant European Metal Recycling (EMR) has strongly denied unfounded rumours that have dogged the firm over recent weeks, regarding financial difficulty and a potential sale of the business.
EMR has called all rumours fanciful and wild.
In a statement issued to MRW EMR director for business development Graeme Carus said: In a time of concern in industry in general, this level of unsubstantiated rumour serves only to compound the issues faced by our suppliers who already have concerns about general economic conditions and fuels anxieties in the market at a time when some composure is required.
The long term picture of demand for recycled commodities is positive. However, we understand that the immediate outlook will remain unclear until the global financial situation eases.
Despite unprecedented market conditions, EMR finds itself in a strong position going into the last quarter of its financial year. Market conditions favoured the industry in the first half of the year and EMR were well placed to take advantage on the back of a strong prior year performance.
EMR responds to some of the rumours circulating within the industry:
* EMR is for sale
* A number of suitors are rumoured to have acquired the business or be in the process of acquiring the business, none of which is true. EMR remains strongly and proudly independent.
* The US business has filed for bankruptcy protection
* Clearly if true this information would be in the public domain. This protection can only be granted by the US courts with onerous communication requirements on companies. The US subsidiary continues to be strong in performance and balance sheet.
* Suppliers have had credit insurance declined for EMR
* On the back of industry rumours, one credit insurer refused cover prior to asking for updated information, which perhaps says more about the conditions credit insurers are operating under than the performance of EMR . The credit insurer reversed this decision immediately on presentation of 2007 statutory and up to date management accounts. To the best of our knowledge this affected a single application from one UK company. Other than this minor blip all the relevant credit insurance companies remain extremely confident in EMR due to their informed position.
* EMR has large financial exposure to Lehman Brothers
Untrue. EMR had and has no financial exposure whatsoever to Lehman Brothers.
* EMR are making loss on sales transactions/carrying excessive stock
We are clearly unprepared to comment on the specifics of this for commercial reasons, but EMRs performance and financial strength is clearly satisfactory to the major credit insurers.
* Colin Illes has walked out on the business
Not true. Colin continues as group managing director and chief executive officer of our US operations and is alive, well and very happy in New York.