Neumarkt/Munich - The shareholders of Pfleiderer AG at today’s shareholders’ meeting approved with a 93.3 % majority a capital cut and a subsequent capital increase of up to €100 million. 44.2 % of share capital was represented at the shareholders’ meeting. The shareholders’ approval was a prerequisite for implementing the restructuring concept presented in May, which aims to relieve debt and institute a series of measures to reorganize the company’s operations.

As a result of the capital cut approved today, shareholders will initially retain only around 0.8 % of current equity. In return, they will have the opportunity
to increase this share to about 16% by way of a capital increase.

The Group’s financial restructuring remains on schedule with this move. As part of the restructuring initiative, creditors had agreed to waive their claims, with the waiver being conditional to both the bondholders and shareholders’ approval of the restructuring plan and to the implementation of the projected capital increase of Pfleiderer AG.

The holders of the hybrid bond issued in 2007 at a nominal value of €275 million had already agreed in June to waive their claims in full. This waiver is tantamount to some €330 million in debt relief for the Pfleiderer Group. In return for this waiver, bondholders will be entitled to acquire up to 4% of Pfleiderer AG’s equity after the planned capital increase has been carried out.

Hans H. Overdiek, Chief Executive Officer of Pfleiderer AG, notes, "Today’s decision marks the return of brighter prospects for our customers and the more than 5,000 employees of our company. We had gained the support of financial creditors and hybrid bondholders earlier on; now our shareholders also support the proposed restructuring plan. We will expedite the operational restructuring of our Group, and are now able to devote all our attention to satisfying our customers’ demands."

Important objectives have already been achieved with the operational restructuring effort: As previously announced, the Nidda plant was shut down at the end of June 2011. The closure of the Gschwend, Ebersdorf and Nidda factories, a part of the agreed restructuring plan, aimed to reduce overcapacity in the market and better utilize the remaining factories.

Key points of the financial restructuring

The plan calls for creditors to waive their claims to the Group’s financial liabilities in the amount 40% of their receivables, including part of the accumulated interest and fees. The total amount comes around €380 million.

Furthermore, the creditors provided to the company in May 2011 an additional credit line of €100 million in the form of a first-lien secured loan. Half of this loan is to be repaid after the capital measures have been carried out.

As a result of the capital cut approved today, shareholders will initially retain only around 0.8% of current equity. However, they have the option of increasing their share of equity by up to 15%, from 0.8 % to up to around 16% by subscribing to their allotted share of the capital increase against a cash contribution of up to €40 million.

To restore a sound equity base, the plan calls for a cash capital increase to raise up to €100 million. Certain senior secured creditors are to raise €60 million of this figure, and up to €40 million are to be financed by the shareholders of Pfleiderer AG or other third parties.

The financial creditors are also prepared to provide a further senior secured credit of up to €40 million to cover that part of the capital increase which is not raised by the shareholders or other third parties. The planned injection of up to €100 million is therefore guaranteed in any event.

Creditors who participate in the cash capital increase are to hold, upon its completion, at least 80% of Pfleiderer AG’s increased equity. This percentage may increase to the extent that neither the current shareholders nor third parties subscribe to their allotted shares in the capital increase. The majority situation will reflect both the creditors’ significant waiver of claims to receivables and their guaranteed cash injection of up to a further €40 million.

The implementation of the restructuring plan is expected to continue well into the second half of 2011, and possibly into the first quarter of 2012.

Hagebusch replaces Burmester in the supervisory board

The shareholders’ meeting also confirmed Alfred Hagebusch as a new member of the supervisory board. He replaces Dr. Helmut Burmester, who in February 2011had stepped down from his position as a member of the company’s supervisory board. By a decision rendered in March at the request of the executive board and the chairman of the supervisory board, the Nuremberg District Court appointed the attorney Alfred Hagebusch to replace Mr. Burmester for a term of office expiring at the end of the company’s next shareholders’ meeting.

About Pfleiderer:

The Pfleiderer AG (ISIN DE 0006764749) is one of the world’s leading producers of engineered wood. The company employs approximately 5,100 people and operates 17 locations in North America, Western and Eastern Europe producing engineered wood, surface finished products and laminate flooring. Pfleiderer is a preferred partner of the furniture industry, specialist and home improvement stores, and interior design suppliers. In fiscal year 2010, the Group generated consolidated revenues of approximately €1.5 billion.

SOURCE: Pfleiderer AG

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