3D Metalforge closes Singapore and US subsidiaries
The Australian company had been struggling with insolvency for the past few months
3D Metalforge, a metal AM service originating in Australia (where it is publicly listed on the ASX index since a $10 million AD IPO in 2021), and operating subsidiaries in Singapore and Texas, has officially closed both its overseas activities after struggling with operational efficiency and insolvency since mid-2022. 3D Metalforge is the latest in a series of (mostly publicly listed) AM service providers that have had to restructure or declare bankruptcy after failing to scale up their operations.
In spite of an expected transition towards reshoring and more localized manufacturing to improve supply chain resiliency, It has not been an easy year for AM service providers. Even some of the largest and most established companies, including Materialise and Proto Labs have seen their stock price decrease dramatically. In such a challenging global scenario, some of the newest companies are most affected.
Operating out of Texas and Singapore, 3D Metalforge had part supply deals in place with entities such as PSA Corporation Limited (PSA), where it recently extended the A$387k contract originally awarded in July 2021, for the production of metal parts within the port facility, by a further 12 months. Additionally, other metal parts under projects worth a combined $116,000 with the Maritime Port Authority of Singapore were produced in the facility thus requiring the extension of the delivery period under the original contract. 3MF is also producing plastic parts (rollers for crane operations) in the additive manufacturing facility in the port under a contract with PSA Corporation.
While these were high-profile deals they did not generate enough revenue for the company to prosper. In September 2022, 3D Metalforged reported restructuring its financing to support the growth of current opportunities, such as the 4-year contract with Woodside Energy as well as new opportunities to drive long-term growth. The restructured financing saw early and core investors in 3D Metalforge agreeing to convert $800k of debt (principal and interest) held into shares, thereby strengthening the Company’s balance sheet.
Continued cost reduction was also carried out through the Company’s operational efficiency program, in particular by reducing monthly manpower cost by approximately 30% from August 2022 onwards, cutting administration, corporate, and travel costs as well as by optimizing current capital equipment by canceling the next 6 months capital equipment expenditure.
These did not suffice and 3D Metalforge had to turn to the High Court of the Republic of Singapore, under Section 64 of the Insolvency, Restructuring and Dissolution Act 2018, for a temporary moratorium to restrain the commencement of certain legal actions by creditors. The request was upheld by the court. However, in December 2022, the Company terminated all staff employment contracts and all independent contractor agreements for 3D Metalforge Pte Ltd (the Company’s Singaporean operating subsidiary) and terminated all staff employment contracts for 3D Metalforge LLC (the Company’s Houston operating subsidiary). These represent substantially all of 3D Metlaforge’s AM service operations.
Most staff in 3D Metalforge Pte Ltd have a 1-month notice period and will continue to work during this period. Staff in 3D Metalforge LLC are mainly employed on an “at will” basis and so will cease work immediately. The Company is contacting customers to make appropriate arrangements for the discharge of current Company project obligations.
