Banks loan a hand to Heidelberg

Heidelberg gains billion-dollar credit line to secure its future up until 2012.

The financing package includes three main components: a EUR 300 million ($A507million) loan from the Special Program of the KfW (Reconstruction Loan Corporation) for large companies (with a 50 per cent indemnity from the KfW to the banks), a EUR 550 million ($A929 million) loan supported by 90 per cent guarantee pledges from the Federal Government and the States of Baden-Wurttemberg and Brandenburg, and a syndicated credit line from a consortium of banks, also for EUR 550 million.

This provides the company with a credit line totalling EUR 1.4 billion (A2.4 billion) for the period up to the middle of 2012. In June, Heidelberg received loan pledges in principle from the banks and guarantee pledges from the Federal and State Governments. Now that the agreements have been signed, the documentation is complete and the deeds of guarantee will be issued and sent out before the end of August.

“Despite the difficult conditions on the financial markets, Heidelberg has succeeded in renegotiating its existing financing structure. The new financing framework will enable the company to bridge the period until the difficulties in securing loans within the financial system ease," said Heidelberg CFO Dirk Kaliebe.

Andy Vels Jensen, managing director of Heidelberg Australia New Zealand, believes it is good news not only for the Heidelberg family, but for the printing industry as a whole because it is proof that “someone obviously believes in print … having a future.”

While the deal will have no direct impact on Heidelberg ANZ business Vels Jensen hopes that liquidity in the market might improve. “Printers and suppliers to the industry are currently at the mercy of a handful of finance options locally, as most overseas lenders abandoned the ANZ market last year,” he said.

“We can only wait for the local big banks to again start supporting our industry or for the government not only to get behind print as a way to communicate with the population, but for government to entice overseas finance institutions back into the country.”