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Oerlikon expects modest recovery of business volumes
Apr '10
Oerlikon Group announces its annual results for 2009 as well as the successful conclusion of negotiations with its lenders and main shareholder Renova regarding a comprehensive financial restructuring of the company. The agreed restructuring package, which includes a CHF 1 000 million rights offering, will be implemented in the first half of 2010. The agreed measures are expected to strengthen the equity base of Oerlikon by up to CHF 1.3 billion and reduce net debt by CHF 1 050-1 300 million (approximately 77 percent) as further summarized below.

"Together with the ongoing operational restructuring, the financial restructuring will provide the basis for bringing Oerlikon's business segments back to profitability and support their sustainable long-term development," says Vladimir Kuznetsov, Chairman of the Board of Directors.

Hans Ziegler, CEO of Oerlikon Group, comments: "We are returning Oerlikon to a solid and sustainable operational and financial footing which will put us in a position to generate profitable growth again in the future".

"The financial restructuring will significantly strengthen our equity base and reduce Oerlikon's indebtedness to a sustainable level. In addition, it will remove short-term refinancing risk and repayment risk until maturity of the new loan facilities in June 2014. Together with the ongoing operational restructuring, the financial restructuring will lay the foundation for bringing Oerlikon's business back to profitability and support its sustainable long-term development", comments Jürg Fedier, CFO of Oerlikon Group.

The substantial indebtedness resulting from the debt-financed acquisition of Saurer in November 2006 combined with the subsequent unprecedented downturn of the global economy in 2008 and 2009 have had a significant detrimental effect on Oerlikon's financial position. The abrupt and substantial drop in demand for Oerlikon's products and services during the economic downturn has heavily impacted the Group's profitability and has made the current level of debt unsustainable.

The company has now reached agreement with its largest shareholder Renova and the lenders of the CHF 2.5 billion syndicated loan facilities regarding a comprehensive financial restructuring of Oerlikon. Cornerstones of the financial restructuring include:

• a capital decrease in the form of a nominal value reduction from CHF 20 to CHF 1 per share;
• a subsequent capital increase by means of a CHF 1,000 million rights offering of 268.7 million new shares to existing shareholders at an issue price of CHF 3.72 per share, with a commitment of Renova to exercise its subscription rights and a backstop commitment by the lenders to subscribe for any remaining new shares for which rights have not been exercised in the rights offering (other than by Renova) against conversion of debt;
• a possible further capital increase of up to CHF 150 million through the issuance of up to 40.4 million additional new shares to the lenders against conversion of debt in a nominal amount equal to the issue price of CHF 3.72;

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