Insolvency administrator Marc d’Avoine said the ongoing process with potential buyers had entered a “decisive phase”.

The local city council in Bergisch Gladbach, near Cologne, has also purchased the entirety of the Zanders 320,000sqm site, having already acquired part of the facility last year.

“The entire site will thus be in the hands of the city in the future, which can implement a long-term, reasonable concept for securing the location,” Zanders said in a statement.

Production continues “unrestricted” although a further 60 employees have been made redundant as part of ongoing restructuring at the papermaker.

Industry speculation about the identity of a potential purchaser for the business is ongoing.

Spain-headquartered Lecta Group, which has mills in Spain, France and Italy, but not currently in Germany, has been mooted as a good fit for the Zanders business.

“Lecta is also in coated paper, and with the sort of volumes that Zanders could potentially manufacture there could be economies of scale,” said a paper industry source. “The sale of the Zanders site to the local council sounds like good news, because that means they will be dealing with people who want to buy it and keep running it as a business from that location.”

There had previously been speculation that Fedrigoni owner Bain Capital, a US private equity business, could be a possible investor.

The Zanders site has two paper machines and an annual production capacity of 325,000 tonnes. Products include Chromolux paper and board, as well as label papers.  

Zanders launched a new uncoated paper made from grass last month.