Pfleiderer works out restructuring plan with creditors
August 16, 2011 | 9:08 am CDT
Pfleiderer works out restructuring plan with creditors  
Among Pfleiderer's diversified holdings is
Pergo, which has a laminate flooring production
plant in North Carolina.

Pfleiderer AG, a global manufacturer of composite wood panels and laminate flooring, said it has hammered out an agreement with its creditors on the financial details of its restructuring.

Pfleiderer's North American holdings include manufacturing operations run by Uniboard and Pergo.

The contents of the contracts are in accordance with the key points announced on April 26. They include the creditors' waiver of their claim to financial receivables (excluding the Eastern Europe financing group) equal to 40 percent of the utilized credit lines, plus part of the accrued interest and fees. This represents an amount of approximately 380 million euros ($535.7 million).

In addition, Pfleiderer said its will provide it with an additional credit line of 100 million euros ($141.0 million) in May 2011 in the form of a first-lien secured loan ("super senior"). Half of the super senior loan is to be repaid after the capital changes have been carried out.

The Executive Board and the Supervisory Board will recommend to the shareholders at an extraordinary shareholders' meeting, which will probably be held in the second half of July 2011, that a massive capital reduction be carried out in a magnitude that will result in the shareholders holding initially only approximately 1 percent of Pfleiderer's share capital. As part of the capital increase they can increase their stake to up to 16%. In order to regain a sound equity base, a capital increase will then be carried out against cash contributions in which funds of up to 100 million euros ($141.0 million) are to be raised. Of that total, 60 million euros ($84.6 million) is to be contributed by the creditors and 40 million euros ($56.4 million) is to be contributed by the shareholders of Pfleiderer AG or by other third parties.

When the capital increase is completed, the creditors are to hold at least 80 percent of the increased share capital of Pfleiderer AG.

The creditors have made the planned debt relief subject to the condition that both the bondholders and the shareholders agree to the steps to be taken without any qualifications in separate meetings. Pfleiderer said the goal of its restructuring is to significantly reduce its debt and restore a sound equity base.

Read the full release outlining Pfleiderer's new credit deal.

Posted by Rich Christianson

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