Pfleiderer AG, one of the worldwide leading manufacturers of engineered wood, surface finished products and laminate flooring, has filed an application for insolvency and subsequently undergone a financial restructuring by way of insolvency plan as debtor in possession. The implementation of the plan has essentially led to the company’s comprehensive debt relief and release from financial liabilities, as well as to the creation of a sound capital base. Financial restructuring measures included a reduction of Pfleiderer’s existing share capital to zero, followed by a capital increase by means of cash and non-cash contributions, namely a Debt-to-Equity Swap. Contributions were exclusively made by Atlantik S.A., a holding company specialized in corporate restructuring and domiciled in Luxembourg, which under the insolvency plan has taken over most of the financial liabilities of Pfleiderer AG. The driving forces behind the success of the reorganization was a team of legal and financial advisors led by Hans-Joachim Ziems and Elmar Geissinger from Ziems & Partner, both acting as executive board members of Pfleiderer AG.
The Pfleiderer Group is one of the worldwide leading manufacturers of engineered wood, surface finished products and laminate flooring with annual revenues exceeding one billion Euros. The company and its approximately 4,900 employees operate 16 locations in North America, Western and Eastern Europe. Pfleiderer is the preferred partner of the furniture industry, specialist and home improvement stores, and interior design suppliers. The company delivers its comprehensive range of core materials and surface-finished products to customers in over 80 countries.
Role of Duff & Phelps
Duff & Phelps was engaged as a financial advisor to the management board of Pfleiderer AG to provide valuation advice in connection with the Debt-to-Equity Swap. Duff & Phelps analyzed Pfleiderer’s business units to be continued under the insolvency plan and set-up various valuation scenarios ranging from an immediate liquidation of the company to a successful execution of the insolvency plan. Duff & Phelps’ services resulted in a valuation opinion as to the fair market value of Pfleiderer AG, including the recoverability of the financial liabilities intended to be swapped into equity. Duff & Phelps closely coordinated with Pfleiderer’s management and various advisors regarding the different measures (financial, operating, and legal) of the insolvency plan, their optimal sequence as well as their financial effects on the valuation. The engagement demonstrates Duff & Phelps’ deep understanding of company valuations in accordance with pertinent German (IDW S1) and international valuation standards in connection with the amended German insolvency law (ESUG).