Gamma Holding undertakes restructuring measures

18 Dec '08

2 min read

As a result of the globally deteriorating economy, the pressure on Gamma Holding's result has further increased since the end of the third quarter. The economic downfall is developing faster and more drastic than expected. With the exeception of the Exotic Fabrics business unit, demand is declining at nearly all business units.

In the mean time, Gamma Holding is executing a cost savings programme within the organisation. In addition, restructuring measures and possible divestments are prepared. Gamma Holding expects to be able to announce further details in the course of the first quarter 2009.

Reorganisation Sleep Care Fabrics:
The reorganisation of Sleep Care Fabrics, announced earlier, is currently being implemented. In the mean time, the mattress fabrics production plant in Münchberg, Germany, has been closed and for the Belgian facility of Waregem a social plan has been agreed on with the partners involved.

Total restructuring costs amount to approximately EUR 29 million, approximately EUR 5.5 million of which are impairments. These costs will be taken in 2008. Through these intended restructuring measures, Gamma Holding expects Sleep Care Fabrics to eventually save approximately EUR 17.5 million on an annual basis.

Financing:
Gamma Holding has agreed with the existing bank syndicate that the company at the end of this year does not have to comply with the covenants in place. Beginning of 2009, Gamma Holding will discuss the medium-term financing arrangements with the banks, based on the measures to be taken.

Outlook:
As a result of the declining market circumstances net group result, excluding restructuring costs and possible impairments of non-current assets, is expected to arrive at approximately EUR 12 - 15 million over the full year. Including restructuring costs, but before possible impairments of non-current assets, net group result is expected to arrive at minus EUR 10 - 15 million. For that reason, Gamma Holding expects no dividends will be paid over 2008.

About Gamma Holding:
Gamma Holding develops, manufactures and sells innovative, high-quality textile-based products throughout the world. The company has some 7,200 employees in 42 countries. Its headquarters are located in Helmond (Netherlands) and its shares are listed on Euronext Amsterdam.

Gamma Holding comprises two sectors. Industrial Solutions comprises process and conveyor belts, filtration products and coated fabrics for roofing structures, tents and printable media. The Lifestyle Fabrics sector comprises mattress ticking and exotic fabrics. With these industrial and consumer-related textile products, the company is a leading global player in its selected niche markets.

Gamma Holding

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