SKW Stahl-Metallurgie Holding AG: SKW Stahl-Metallurgie Holding AG strives for financial restructuring by way of an insolvency plan proceeding

SKW Stahl-Metallurgie Holding AG strives for financial restructuring by way of an insolvency plan proceeding

- SKW Stahl-Metallurgie Holding AG files for insolvency under self-administration

- subsidiaries are not affected; operational business is being continued without constraints

- activist shareholder Dr. Marx is blocking out-of-court restructuring

Munich, September 27, 2017. Today, the management board of SKW Stahl-Metallurgie Holding AG was forced to file for an in-court insolvency proceeding under self-administration at the competent insolvency court in Munich. This proceeding is aimed at the financial restructuring of the holding company with its 13 employees in a "protective shield" proceeding ("Schutzschirmverfahren"). The operative subsidiaries are not affected by this insolvency filing of the holding company. Therefore, the operative business of SKW group of companies is continued worldwide without constraints.

This filing for insolvency was necessary, because the shareholder MCGM GmbH, whose managing director Dr. Olaf Marx is also a member of the supervisory board of SKW Stahl-Metallurgie Holding AG, has blocked the management's concept for a financial restructuring which involved the investor Speyside Equity. The management had to assume that during the up-coming shareholders' meeting on October 10, 2017, the concept would not have achieved the necessary majority of votes. Thereby, the positive continuance prognosis of the overindebted company had ceased and the management board was forced to enter into insolvency. Also, there were no sustainable and promising alternative offers aimed at the financial restructuring of the company available to the management. Due to the initiation of insolvency proceedings, the shareholders' meeting originally convened for October 10, 2017, will be cancelled.

The filing for insolvency has no implications to the operational business of the subsidiaries. In this context, Dr. Kay Michel, CEO of SKW Stahl-Metallurgie Holding AG, points out: "Operationally,
we are better positioned than many competitors worldwide, and therefore our business operations are not threatened by this measure. Furthermore, our operative subsidiaries are financed predominantly locally by regional banks, and not via SKW Stahl-Metallurgie Holding AG. Thus, our subsidiaries remain solvent and will supply their customers with usual quality as well as adherence to schedules."

The requested in-court restructuring under self-administration with "protective shield" proceedings ("Schutzschirmverfahren"), is aimed at continuing the company. It allows for setting up an insolvency plan, which defines the necessary steps for restructuring as well as their exact implementation. It is aimed at achieving the already initiated financial restructuring together with the investor Speyside Equity with the participation of creditors and shareholders in the proceeding under the insolvency plan. However, for the shareholders of the company, today's step, will presumably amount to a complete loss of their invested capital. The management's restructuring plan provided for a capital reduction and a capital increase against contribution in kind by way of a debt-to-equity-swap by the industry-experienced financial investor Speyside Equity.

In the meantime, Speyside Equity and the banks of the syndicated loan agreement have entered into a purchase agreement for the credit claims owed by SKW Stahl-Metallurgie Holding AG under this agreement in the amount of around EUR 74 million. Closing of this transaction is expected in mid-October.

The acquisition of the credit claims by Speyside Equity is not conditioned on the shareholders' meeting taking place and is in no way connected to the now initiated insolvency proceeding. Therefore, the investor Speyside Equity also has a vital interest in continuing the business operations of the operative subsidiaries in an unmodified manner. "We deeply regret that the financial restructuring with the involvement of our shareholders' meeting was blocked by the irresponsible behavior of MCGM", says CEO Michel. "Now, our firm goal should be to fully continue business operations of SKW group of companies for our customers and employees worldwide and to provide a healthy and sustainable financial basis for our company once more, based on which we can continue the positive trend in our operative business and strategically develop the whole group."

Contact

Thomas Schulz
Telefon: +49 171 86 86 482
E-Mail: tsc@tsc-komm.de
Internet: www.skw-steel.com

About SKW Stahl-Metallurgie Holding AG and the SKW Metallurgie Group
The SKW Metallurgie Group is a global market leader for chemical additives for hot metal desulphurization and for cored wire and other products for secondary metallurgy. The Group's products enable steel-makers to efficiently manufacture high-quality steel products. Clients include the world's leading companies in the steel industry. The SKW Metallurgie Group has more than 50 years of metallurgical know how, and currently operates in more than 40 countries. What is more, the Group is a leading supplier of Quab specialty chemicals, which are mainly used in the global production of industrial starch for the paper industry. The SKW Metallurgie Group is headquartered in Germany with production facilities in France, the US, Canada, Mexico, Brazil, South Korea, Russia, the Peoples' Republic of China and India (joint venture). Shares of SKW Stahl-Metallurgie Holding AG have been listed in Frankfurt Stock Exchange's Prime Standard since December 1, 2006; since 2011 (conversion to name shares) with ISIN DE000SKWM021.

Disclaimer

This press release may include certain forward-looking statements which are based on currently available assumptions and predictions of the SKW Metallurgie Group's management as well as on other currently available information. Various identified as well as unidentified risks and uncertainties as well as other factors may result in a deviation of actual results, financial situation, development or achievement of the company compared to the assessments made herein. SKW Stahl-Metallurgie Holding AG does not intend and assumes no liability to update such forward-looking statements and to adjust them to future events and developments.