Pfleiderer Suspending Bond Interest Payments

Neumarkt, Germany, Aug. 3, 2009--Pfleiderer said it would indefinitely suspend payments of interest on its $370.4 million hybrid bond to preserve its liquidity.

"We don't know when payments would resume. The resumption is linked to a series of steps, such as when we start paying again dividends, for example," a company spokesman said.

"We do not have liquidity problems, but given the current market conditions, we have to preserve liquidity," he said.

He also said Pfleiderer has separately been in talks with creditor banks since June regarding an unspecified amount of debts following concern it might breach loan covenants.

As of end-March, Pfleiderer's net debt totaled 766 million euros.

Plfeiderer issued a hybrid bond of 275 million euros in 2007, but the outstanding amount stands at 260 million after it repaid some of the volume.

The company said in June it expects profits to decline markedly this year after failing to see any signs of recovery and that credit agreements might not be fulfilled at the end of the second quarter.