The company will focus on pelletising equipment for plastics during its reorganisation. The Stuttgart-based company announced the news on 22 August.

Scheer will split off its woodworking machinery division, which includes cutting and trimming machinery and large panel saws.

The company said: “Scheer Group intends to concentrate and focus its activities mainly on the pelletising equipment division.”

Md Roland Höhn said the company was forced to start insolvency proceedings because of “bottlenecks” in financing some major customer orders. Scheer officials had made initial contacts with potential investors, even before filing for insolvency.

Höhn said the court proceedings do not affect Scheer Bay, a 10-year-old joint venture company between CF Scheer and Bay Plastics Machinery. Scheer Bay produces its own pelletisers and related products.

The insolvency action also does not affect Scheer’s subsidiary in Shanghai.

Stuttgart lawyer Hendrik Hefermehl has been appointed preliminary trustee for the insolvency case.