Ceepackaging

Corporate

Treofan in negotiations for financial restructuring

The financial restructuring will include an offer to noteholders to tender their notes for equity of the
Treofan Group, an extension of the maturity of the existing senior revolving credit facility along
with a reset of financial covenants as well as a capital injection to principally finance planned
operational and financial restructuring measures.
The majority of the stakeholders have already agreed to the commercial terms of the restructuring
by signing a non-binding term-sheet on April 30, 2009. Noteholders holding 86.17% of the
principal amount of the €170m outstanding 11% Second Lien Notes due 2013 are party to the
legal term-sheet and through their signatures have demonstrated their willingness to tender their
Notes for equity. Closing of the financial restructuring will be subject to receiving tenders of Notes
representing 95% of the aggregate principal amount of Notes and other conditions.
After experiencing a very challenging market environment in the fourth quarter of 2008 with
negative adjusted EBITDA (-€0.6m based on preliminary and unaudited financial statements), the
Treofan Group has been performing better in the first quarter of this year, leading to an improved
operational result compared to the first quarter of last year (adjusted EBITDA of €8.5m versus
€6.1m in the first quarter of last year, based on preliminary and unaudited financial statements).
Treofan’s liquidity was €27.5m as of end of March 2009. However, the market in which the Group
operates, remains very volatile due to the global financial crisis and recessionary concerns. This
creates some general uncertainty about the impact the market situation might have on the
financial performance of the Group in the future. The Group’s equity position is currently negative
(by approximately €75m as of December 31, 2008 based on preliminary and unaudited financial
statements). “We are confident that the envisaged financial restructuring is the appropriate step to
transform our company into a competitive enterprise with a solid financial background, strong
enough to face the challenges ahead and to continue our operational restructuring in a successful
way,” said Wolfgang Posner, CFO of the Treofan Group.
The lenders under the senior credit facility had waived the financial covenants for the fourth
quarter of 2008 and the first quarter of 2009. The senior credit facility matures in July 2010. As
part of the financial restructuring it is intended that the maturity of the senior credit facility be
extended by one year and that the financial covenants be reset to provide for headroom. The
changes to the senior credit facility are part of the overall financial restructuring and will only
become effective at the successful closing of the financial restructuring.
Management of the Treofan Group has decided to delay the preparation of the financial
statements for the fiscal year 2008 until the financial restructuring has been completed, as the
extension of the maturity of the revolving credit facility and the reset of financial covenants are
essential for the company to be able to prepare financial statements on a “going concern” basis.
To this end, on April 30, 2009, Treofan obtained a waiver from the noteholders representing
86.17% of the outstanding principal amount with respect to its obligations under Section 4.03 of
the indenture governing the Second Lien Notes to deliver to the noteholders its year-end 2008
financial statements and its first quarter 2009 financial statements. As a result, the deadline for
delivery of such financial statements has been extended to September 30, 2009 to allow time to
complete the restructuring.
In addition, Treofan received a waiver of its obligation under Section 4.09 (prescribing restrictions
on debt incurrence) and Section 4.11 (prescribing restrictions on affiliate transactions) of the
indenture on the same date so as to enable the Group to agree and enter into the restructuring
term sheet and the appropriate restructuring agreement with stakeholders and to take all steps
prescribed thereby related to the restructuring.
As mentioned above, the restructuring term sheet entered into by the stakeholders of the Treofan
Group is non-binding. Treofan cannot provide any assurance that the financial restructuring
described in this release will be consummated on these exact terms or that any financial
restructuring will be consummated at all.