By Thursday morning it appeared Hans Preben Mehren had succeeded in his last-ditch effort to save Hjellegjerde from bankruptcy. Mehren had gained control over some 570,000 shares, or 4.5 percent of Hjellegjerde’s stock, which he then could re-sell to Interstil, the furniture retailer that had offered to take over Hjellegjerde.
Interstil’s offer, which promised to inject sorely needed new capital into Hjellegjerde, was only valid if it could acquire 67 percent of Hjellegjerde’s stock. The furniture maker’s largest shareholders went along with the plan, in the hopes of keeping the company going, but some small shareholders wouldn’t sell to Interstil. They feared, and still do, that Interstil will move most of the rest of Hjellegjerde’s production overseas, to cut costs.
Mehren managed to buy up lots of the small shareholdings himself, and that seemed to seal Interstil’s bid.
“I’m doing this to secure the future of the furniture industry in Sykkylven, to save jobs in Hjellegjerde and to secure a good customer relationship,” Mehren told newspaper Dagens Næringsliv (DN) and other media.
His own company in Sykkylven, Sandella, has supplied the sculpted foam for the chairs and sofas made by Hjellegjerde and many other furniture makers. He didn’t want to lose Hjellegjerde, which has been a customer for the past 50 years.
Mehren’s rescue effort is likely to cost him more than NOK 300,000 but he said he sees an upside. “I have great faith that Hjellegjerde will emerge from this crisis and be a large and profitable company again, now that its financing problems are solved,” he said.
Formalities still had to be put in place on Thursday but the threat of imminent bankruptcy for Hjellegjerde had subsided. An Interstil official told DN that Interstil wants to maintain the company’s furniture production in Norway, “if it’s economically defensible.”