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Sovello: Situation worse than expected

According to the liquidator, the financial position of Sovello is far worse than feared. The former CEO, Reiner Beutel has resigned from his post. Despite this, operations will continue for the time being.

Sovello is in troubled waters.

Sovello AG

On Wednesday, insolvency proceedings were opened at the Dessau district court over the assets of Sovello. Two days later, appointed liquidator Lucas Flöther has taken the first step. The funding that had been promised by the management for transition of almost 500 employees cannot be fulfilled. "The financial situation of the company is worse than expected," Flöther said.

The creditors have confirmed Flöther's statement and rejected the employee transition funds, due to lack of funding. The 500 employees who have already been terminated should officially immediately register themselves as unemployed, according to Flöther.

The liquidator will now accelerate the search for an investor. With the opening of the insolvency proceedings on Wednesday, Sovello has to now pay back the wages themselves, as the insolvency funds have run out.

The former chairman of the board Reiner Beutel has also resigned. The so-called management and disposal authority now lies with Flöther since Wednesday. The other board members Hans-Jörg Axmann and Andreas Ehrler continue to support the insolvency proceedings.

Sovello had initially applied for self administered proceedings in May. In the following weeks, interviews were conducted with investors and a Chinese investment came to light. The Saxony-Anhalt state however rejected this option on Monday as unsustainable and decided to not provide anymore financial support. On Wednesday, the court opened formal insolvency proceedings and self-administration was discontinued.