Restructuring and refinancing plan to boost Oerlikon’s balance sheets

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Oerlikon Group has announced its plans to restructure its finance base with its syndicate banks. The proposal, submitted by Oerlikon to the banks on November 25th, details its plans to defer repayments of the principal amounts of the term loan and revolving credit facility, lower interest charges and conversion of parts of the bank debt to an equity stake in OC Oerlikon.

The proposal includes a substantial reduction in current equity capital followed by a capital increase, which will be backed by The Renova Group, a 45% stakeholder in Oerlikon, who will also act as underwriter for the restructure. Following the settlement of the details with the syndicate banks at the end of February 2010, the equity increase is expected to come into force during the first half of 2010.

The company will also carry out an extraordinary write-down in the solar segment. This reduction will amount to double-digit millions of Swiss francs, but will have no effect on the Oerlikon Group’s cashflow, according to the company’s announcement. The write-down is a result of market challenges combined with technological advances in production facilities and product design.

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