SPICERS (ASX:SRS) has been forced to pulp its European operation after it was placed into administration last October.
The listed paper merchant has revealed that its German-based arm PaperlinX Deutschland GmbH and its immediate parent entity Deutsche Papier Holding GmbH have entered into full insolvency proceedings after failing to find a buyer and continued losses being recorded by the group.
The latest news marks a troubled years for the company, formerly known as PaperlinX, with its UK division placed into administration last April.
Spicers says Markus Planther has been appointed insolvency administrator to its German business following insolvency proceedings issued in court on December 28.
"This decision was taken as the business continued to trade unprofitably and attempts to sell the business were unsuccessful," says the company in a statement to the ASX.
Spicers posted a $392.3 million loss in FY15, largely due to its loss-making offshore operations in Europe and from the sale of its Canadian operations below book value.
The company, which has a history spanning 100 years, said at the time that its Australian, New Zealand and Asian operations remained profitable.
The company undertook a strategic review of its European business in 2014, citing the distressed state of the paper industry in the region.
It found that the European arm needed a significant capital outlay to turn around its performance despite previous efforts to restructure the business.
The company decided last year not to support the business, citing concerns that doing so could threaten the viability of the entire group.
Spicers has focused on diversifying its business in the Australian market in recent years, adapting to what it says are changing circumstances in the sector.
The embattled group's shares slumped 16 per cent to 2.6c today.
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