Suominen has made an agreement of a credit facility in the amount of EUR 44 million to refinance the syndicated credit facility of 2008. The credit arrangement includes a three-year amortizing loan and a revolving credit facility for two years.
The credit terms have been eased concerning covenants on debt service. Terms and conditions have been tightened in terms of interest rate margin and security arrangements, and there will be limits on investments, dividend distribution and third-party borrowing. The company's financing costs are expected to increase next year by more than EUR 1 million.
Suominen is recording a non-recurring write-down of goodwill in the amount of EUR 4.9 million in the company's 2010 financial statements. The impairment loss concerns the Nonwovens cash-generating unit. Suominen has tested the goodwill allocated to cash-generating units for impairment. Because of market uncertainties a greater risk than before has been accounted for in the calculations. The record has no effect on the cash flow. Following the write-down, the unit will no longer have any goodwill.
In the Codi Wipes unit, Suominen has launched planning of measures aimed at reorganising operations. For that purpose, the co-determination procedures will be started in the Netherlands with an employee representative, in accordance with the local protocols. If the reorganisation measures are carried out as planned, the unit will record non-recurring costs of approximately EUR 1 million for the year as a consequence of the arrangements. A similar amount of savings is forecast for next year.
In its September quarterly report, Suominen estimated that the company's overall operating profit for 2010 will be negative due to the decrease in sales volumes, lower margins and non-recurring expenses. The company previously announced that it will record non-recurring costs this year totalling nearly EUR 1 million as a result of restructuring in Flexibles business area and the shutting down of the Nastola plant.
Helsinki, 9 December 2010
Board of Directors
For additional information please contact:
Mr. Petri Rolig, President and CEO, tel. +358 (0)10 214 300
Mr. Arto Kiiskinen, Vice President and CFO, tel. +358 (0)10 214 300
Suominen produces high-quality flexible packaging, wet wipes and nonwovens for industry and the retail sector. The Group is one of the Europe's leading manufacturers in all its business areas with operations in Finland, Poland, the Netherlands, Sweden and Russia. The Group had net sales of EUR 179 million in 2009 and it employs around 1,000 people. Suominen is listed on NASDAQ OMX Helsinki. www.suominen.fi