Jones secures loan, dodges German parent trap
Charlotte contracting giant J.A. Jones Inc. may not be reeling from the March bankruptcy of German parent Philipp Holzmann AG, but it is taking action. Reportedly in talks with another well-heeled German suitor, the firm has secured a $200 million loan from a group of international banks.
Itself a $3 billion firm with nine subsidiaries and $4.5 billion worth of work in backlog, Jones claims the loan is unrelated to Frankfurt-based Holzmann's insolvency and stresses its own continued strength, both on the balance sheet and in markets worldwide. The syndicated, two-year renewal loan by a consortium of Deutsche Bank, Bayerische Landesbank and DZ Bank supports that.
"The timing of the loan may appear that it was tied to the Holzmann situation, but it was not," says John Deem, a Jones spokesman. "It's a demonstration of confidence in the company (which) always has had syndicated loans."
Furthermore, no Jones project will be delayed or in any way adversely affected by the Holzmann situation, he adds. So, the loan essentially is a line of credit that allows Jones to continue to conduct its day-to-day operations uninterrupted.
"Over the past three years, measures have been put in place to insulate J.A. Jones from the possibility of a Philipp Holzmann insolvency," said Jones CEO Al Neffgen in a statement last month. "These safeguards are proving to be effective and will allow us to carry on our business unabated."
In Charlotte, industry observers suspect the local firm's efforts to insulate itself from Holzmann — which first filed for bankruptcy protection in 1999 — had caused friction with the troubled parent. But now, prospects seem decidedly brighter.
"From a business perspective, there appears to be no significant impact on [Jones'] ability to maintain operations and secure work," says Stephen P. Gennett, president and CEO of Charlotte-based Carolinas AGC Inc., the regional chapter of Associated General Contractors, of which Jones is a member. "They are continuing their effort to improve their profile in North Carolina, and they aren't operating with any sense that their position as a significant contractor will be adversely impacted by this," he adds.
Suitor declares intentions
On the contrary, Jones apparently already has caught the eye of a Holzmann rival, Bilfinger Berger AG. Last month, the Mannheim, Germany-based firm confirmed that it is interested.
"Bilfinger Berger is currently looking into the taking over of individual parts of Phillip Holzmann," admitted Sascha Bamberger, a Bilfinger spokesman. But "at this time the present insolvency officer has taken no concrete steps for the disposal of the U.S. affiliates."
To date, Deem says Jones has had no contact with Bilfinger or any other suitor.
Last year, Jones accounted for 60 percent of Holzmann's total, placing 8th on our annual ranking of the Design/Construct 300 with $1.5 billion in revenue (BD&C, 7/01, page 42).