Pfleiderer calls shareholder meeting after revealing expected losses

Troubled particleboard and fibreboard giant Pfleiderer AG has called an extraordinary meeting of shareholders after saying it expects to post a loss for 2010.

The company said it expected to post a loss due to restructuring, included the closure of production facilities and the impairment of equity which will reduce its share capital by more than half.

Pfleiderer said the final total of its losses for 2010 has not yet been determined, but stressed that the balance sheet impairments had no impact on cash or the company’s liquidity.

“The standstill agreement with our banks and credit insurers and the company’s liquidity are not affected,” said chairman Hans Overdiek.

“The restructuring measures we have taken are showing the first positive effects.”

The company said its sales increased 8% last year, while the start of 2011 had seen significant increases in prices of raw particleboard and surface-finished panels, “thus laying the foundations for a sustained improvement in the company’s profit margins”.

The reduction in a company’s share capital by more than half triggers a statutory disclosure duty and convening of an extraordinary shareholder meeting.

Pfleiderer, the world’s second largest producer of chipboard and fibreboard, has been struggling under a €914.5m debt burden and a sales decline and excess capacity in its core western Europe and North American markets.