December 27, 2002 -- The Board of Directors and the Executive Committee of Gretag Imaging Holding AG have found during in-depth analysis and preparation for the planned restructuring of the Gretag Imaging Group, that the over-indeptedness after implementation was inevitable. The Board of Directors of Gretag Imaging Holding AG has therefore decided to present its over-indeptedness to the Courts.
At the beginning of December, the Board of Directors and the Executive Committee of Gretag Imaging Holding AG announced a drastic restructuring and downsizing plan for the Gretag Imaging Group. Shareholders had been asked to decide upon the financial restructuring at the extraordinary general assembly, which was called for 23rd December 2002. A capital cut of 90% was planned followed by an increase in capital in 2 stages. Messers Eduard Brunner and Hans-Rudolf Zulliger intended to subscribe to CHF 15 million worth of shares, subject to certain conditions. Urgently needed liquidity would have been made available to the Gretag Group by these means.
The Board of Directors used the time, up until today's scheduled extraordinary general assembly, for intensive negotiations with its creditors. Although the room to manoeuvre within the negotiations was extremely tight, they managed to obtain verbal agreements from both the Italian Banks and Kodak to partially waiver their claims. In order for the claims to be wavered, the rest of the outstanding debts had to be paid in the short term, thus increasing the corresponding demand on liquidity.
In parallel the Board of Directors, under new leadership, along with the Management, analysed the various options available to put concrete plans into action. The liquidation respectively the re-development of the subsidiaries, particularly Gretag Imaging Trading AG proved to be unavoidable, in order to restore the balance sheet of Gretag Imaging Holding AG. In view of the complex financial and legal integration within the Group, the Board of Directors were unable to find a practicable solution which could be implemented in the short time available and in accordance with the law.
In the end, the problem of over-indeptedness, along with the demands on short-term liquidity proved to be insurmountable. A worsening business outlook, requested extensive adjustments of the value of interests in subsidiaries, inventory and liabilities between Group companies. This, together with the fact of only verbal agreements for the release of loans, has made it impossible to present a balance sheet of Gretag Imaging Holding AG on the date of the extraordinary general assembly, which fulfils the requirement of a positive equity value after the reduction of the nominal share value and the increase in capital.
As a consequence the Board of Directors of Gretag Imaging Holding AG has decided that it is no longer possible to justify continuing doing business as a Group of Companies. It will therefore present the over- indeptedness to the district courts at the earliest possible opportunity. A solution is being sought to save those parts within the company, in particular Gretag Imaging AG, which could continue to operate.
Therefore it is not possible to vote upon the resolutions as given in today's extraordinary general assembly. The Board of Directors will inform the shareholders present of the situation.
In Switzerland, 400 employees along with around 600 employees in other countries will be affected by these measures. The Board of Directors deeply regrets that they have had to announce this decision so shortly before Christmas. The means to pay the December salaries had been made available.
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