Business News
Ad Hoc: schlott gruppe: Continued existence of debt financing at risk
Monday 17. January 2011 - schlott gruppe AG has suffered a severe setback today in its restructuring process.
As communicated several times, schlott gruppe AG has been in an extensive restructuring process since 2009. Even if reducing the costs could be reached to the full intended extent in the financial year 2009/10, the development of the market and the related pricing pressure in the market have taken a more negative development than expected and have put the earning rates under an enormous pressure. As a result, the company figures in the last months of the financial year 2009/10 have developed worse than assumed in the financial planning on which the current financing had been based. As also already published, the basis for the current restructuring and the underlying financing was the business model derived from the former restructuring schedule. As customary in such situations, the creditors have an extraordinary right to terminate the relevant loan agreements in case the company figures fall below the business planning. As a further consequence, a material writing down of goodwill is expected in the consolidated annual statements for the financial year 2009/10. The exact amount, however, has not yet been decided upon.
As a reaction to such market developments, in autumn 2010 schlott gruppe AG together with external advisors has developed a concept for strategically repositioning the company as well as a corresponding financing concept. Besides a substantial capital increase this financing concept comprises further extensive concessions with respect to debt capital. In the course of these negotiations the repayment of due bank liabilities has been deferred. Despite the intensive and promising negotiations in the last few months with both the providers of equity capital and of dept capital the company today has been informed that the negotiations with a potential equity capital provider have not been successful.
On Monday next week a meeting with the financing partners on the debt capital-side will take place in Nuremberg in order to discuss the next steps and measures to be taken. In case some financing partners will exercise their right to extraordinarily terminate the respective loan agreements, schlott gruppe AG will not be able to service such debts.