Gretag Imaging to Liquidate Holdings

By: Jim Rosenberg Updated at 4 p.m. EST, Jan. 16

Owing to what it called "overindebtedness" that was "inevitable" despite a planned restructuring, directors and executives of Gretag Imaging Holding AG, Regensdorf, Switzerland, last month left Gretag Imaging Group businesses' disposition in the hands of the courts. An announcement said "a solution is being sought to save those parts within the company, in particular Gretag Imaging AG, which could continue to operate."

The action will affect 400 employees in Switzerland, and approximately 600 employees in other countries. It does not affect GretagMacbeth, a separately incorporated color measurement, controls, and services company, independent of Gretag Imaging, formed in 1997 by the merger of Gretag AG's Color Control Systems division and Kollmorgen Corp.'s Macbeth division.

In 1999, Gretag acquired Cymbolic Sciences. Based near Vancouver, British Columbia, Cymbolic's laser drum platesetters were the first computer-to-plate imagers used in sustained live production at U.S. dailies in the 1990s. (Holland's Oc? N.V. acquired Cymbolic's wide-format photo laser printer business when it bought Gretag's Professional Imaging Division in late 2001.)

A "drastic restructuring and downsizing" of the group, presented to shareholders last month, planned a capital cut of 90%, then a two-stage increase in capital. "Urgently needed liquidity" was to come from 15 million Swiss francs in sales of shares to Eduard Brunner and Hans-Rudolf Zulliger.

Until a Dec. 23 extraordinary general meeting, directors reached agreements with banks and Eastman Kodak (holder of an almost 5% stake and a convertible loan) to partially waive their claims provided the rest of the outstanding debts were paid in the short term, "thus increasing the corresponding demand on liquidity."

Besides over-indebtedness and demands on short-term liquidity, the company also cited "a worsening business outlook" and other difficulties, as well as no more than "verbal" agreements for the release of loans.

Last spring, a "cautiously optimistic" Gretag Imaging announced new management and the company's "assured survival." It named new directors and posted a break-even fourth quarter. By early summer it saw an "upward sales trend," but in late August it said sales had "stabilized," costs had been reduced, and liquidity was "still precarious." A restructuring announced in October was said to be faring well on Nov 1. Ten days later the presiding director resigned.