Pfleiderer, creditors sign financial restructuring contracts

Neumarkt - Pfleiderer AG (ISIN DE 0006764749) has agreed with its creditors on the financial details of the Group's restructuring and has signed the relevant contracts. The contents of the contracts are in accordance with the key points announced on April 26, 2011. 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.

Furthermore, the creditors will provide Pfleiderer with an additional credit line of 100 million euros 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 are to be raised. Of that total, 60 million euros is to be contributed by the creditors and 40 million euros is to be contributed by the shareholders of Pfleiderer AG or by other third parties. The creditors are also prepared to provide a further first-lien loan ("super senior") in the amount of that portion of the capital increase of up to 40 million euros that is not contributed by the shareholders or other third parties, so that the planned cash inflow of 100 million euros is in any case guaranteed.

When the capital increase is completed, the creditors are to hold at least 80 percent of the increased share capital of Pfleiderer AG. This proportion may increase to the extent that existing old shareholders or third parties do not subscribe to the shares allocated to them in the capital increase. The majority shareholding reflects the significant waiver of receivables and the guarantee of the cash inflow through the super-senior loan of up to 40 million euros. The shareholders can increase their stake in the company's share capital by up to 15 percent from 1 percent to up to 16 percent by subscribing to the portion of the capital increase which is assigned to them against cash contributions of up to 40 million euros. The holders of the hybrid bond issued in 2007 with a nominal volume of 275 million euros are to fully waive their rights and in return will hold 4 percent of the company's share capital after the capital increase. Including the accrued unpaid interest, this amounts to further debt relief of approximately 340 million euros.

Those creditors that waive 40 percent of their receivables but do not wish to participate in the capital increase will receive bonds with warrants that can be converted into shares under certain conditions.

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. The measures described above will lead to a significant reduction in the Pfleiderer Group's debt and to the restoration of a sound equity base.

SOURCE: Pfleiderer AG

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