Lenders for struggling Swiss conglomerate Oerlikon and its major shareholder have approved rescue package worth up to SFr1.3 billion ($1.28 billion).
The debt-laden technology group on Thursday announced it had slipped deeper into the red, losing SFr592 million last year, SFr170 million more than in 2008.
Oerlikon will slash net debt by around 77 per cent under the plan, which came after months of negotiations between shareholders and bankers. It said it hoped to return to operating profitability in the second half of the year.
Russian billionaire Viktor Vekselberg, who currently holds a 45 per cent stake through his holding group Renova, is ready to inject SFr450 million in a capital hike, while the group's lenders will waive some of the debt and are willing to swap debt for equity as part of the restructuring plan.
"Oerlikon, Renova and the lenders strongly believe that the financial restructuring comprehensively addresses the group's financing situation and establishes a sustainable capital structure in a single step," Oerlikon said in a statement.
The 100-year-old company, based on the outskirts in Zurich, said orders dropped from SFr4.3 billion to SFr3 billion. Revenues fell nearly 38 per cent to SFr2.88 billion.
Oerlikon took a SFr350 million hit on special charges. Its textile business wrote off SFr202 billion.
Oerlikon’s restructuring has already proven effective. The company said it had already saved SFr237 million and that by the end of 2011, cost levels will have been reduced by SFr400 million.
swissinfo.ch and agencies