AgfaPhoto GmbH filed for insolvency

Though both Agfa-Gevaert NV, the new owners and the management had stressed the solid financial base of AgfaPhoto last year, the company has not been able to survive for seven months. While AgfaPhoto has officially confirmed that the company is insolvent, no more details have been released. According to industry sources, the production of film and photographic paper is momentarily fading out and will be completely ceased shortly. According to a spokesman of the AgfaPhoto work council, the insolvency came as a sudden surprise to the 2,400 employees, which will not receive their May payments.

AgfaPhoto GmbH is a 100 percent subsidiary of AgfaPhoto Holding GmbH, which belongs to NannO Beteiligungsholding GmbH, Munich, Germany (55 percent), the AgfaPhoto Management (25 percent) and the American holding companies Abrams Capital and Highfields Capital Management (10 percent each). According to a press release issued by Agfa-Gevaert NV, Agfa-Gevaert provides the AgfaPhoto Group with distribution, order fulfillment, after sales and other services until the end of 2005.

At the time of the sale of its previous Consumer Imaging business, Agfa-Gevaert granted a secured vendor loan for the full purchase price of Agfa-Photo. Based on Agfa-Gevaert’s audited financial statement, the purchase price was set at Euro 112 million, which is still subject to an audit of the closing financials by the purchaser. The vendor loan is fully secured by a lease portfolio held by AgfaPhoto Holding GmbH, the parent company of the AgfaPhoto group. Since AgfaPhoto Holding GmbH is not implicated in the insolvency-filing of the AgfaPhoto GmbH, Agfa-Gevaert does not expect any material effects from the collapse of the German company.