Neumarkt -- In the form of a so-called posting, Pfleiderer AG sent the preliminary agreements for the Group’s financial restructuring to its creditors. These draft contracts are based on intensive negotiations between Pfleiderer AG and its creditors’ negotiating committee, which continued until shortly before the posting. In this context, Pfleiderer has disclosed the following key points of the current status of the restructuring concept:

It is planned that the creditors will waive their claim to a part of their financial receivables (excluding the Eastern Europe financing group) equal to 40 percent of the respective utilized credit lines, plus part of the accrued interest and fees.

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 only approximately 1% of Pfleiderer’s shares after the other capital changes. 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 be higher if neither the existing old shareholders nor third parties 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 subscribing to the portion of the capital increase which is assigned to them against cash contributions of up to 40 million euros by up to 15 percent from 1 percent to up to 16 percent. 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.

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.

All details are still preliminary and subject to the creditors’ approval and the signing of the respective agreements, which is anticipated for the middle of May
2011. Pfleiderer cannot preclude the possibility of changes in the draft agreements because they are now being reviewed by the various banks and other creditors. The implementation of the restructuring concept also requires the approval of the holders of the hybrid bonds and the shareholders, and certain other conditions must be fulfilled. The restructuring is also intended to lead to a substantial reduction in the Pfleiderer Group’s debt and to the restoration of an adequate equity base.

SOURCE: Pfleiderer AG

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