The European Investment Bank (EIB) and Oerlikon have agreed a loan totalling approximately CHF 150 million to provide low-cost financing to the company's research and development projects (R&D projects). The facility has a term of four to five years providing a very attractive interest rate.
"The agreement with the EIB is a further step in our approach to diversify our sources of financing and also gives us additional flexibility to execute on our growth strategy", says Jürg Fedier, the company's CFO. "Research, development and innovation are critical elements in Europe's competitive position", says Wilhelm Molterer, the Vice President of the EIB who oversees financing in Germany, where a major portion of the research work will be conducted. "The EIB focuses on this area in particular as part of its financing activities. Oerlikon's R&D projects meet our demanding financing criteria, and we are happy that we can provide an appealing financing concept to this technology company."
The mission of the EIB, the lending institution of the European Union, is to promote research and development projects in the EU. In carrying out this mission, the EIB provides about EUR 16 million in financial support every year. Oerlikon invests about 4 % to 5 % of its sales into research and development to sustainably bolster its technological leadership. "Unique technology that enables us to stand out in a competitive marketplace is our most important success factor", Fedier says.
Last year, the EIB approached Oerlikon and offered the company a way to finance its high R&D expenditures at an attractive interest rate. Following a careful review of the R&D projects, it was determined that they qualified for the EIB's support. Now, EIB and Oerlikon have entered into a CHF 150 million loan agreement. Oerlikon has a period of 24 months to draw on the credit facility otherwise the facility will expire. The repayment terms will be jointly defined by both partners at the time that each tranche is used. "With current net liquidity of about CHF 963 million and an equity ratio of 49 %, the agreement with the EIB further strengthens our financial position", says Oerlikon's CFO, Jürg Fedier.
Background information
About the EIB:
The EIB is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals. In the field of research, development and innovation (RDI), the Bank provided financing of EUR 10 billion last year. In 2013, a volume of up to EUR 16 billion in RDI financings will be reached. On the basis of one of its external mandates, the EIB has financed projects in EFTA countries since 1994.
About Oerlikon:
Oerlikon (SIX: OERL) is a leading high-tech industrial group specializing in machine and plant engineering. The Company is a provider of innovative industrial solutions and cutting-edge technologies for manmade fibers manufacturing, drive systems, vacuum, coating, and advanced nanotechnology. A Swiss company with a tradition going back over 100 years, Oerlikon is a global player with around 13 000 employees at around 160 locations in 34 countries and sales of CHF 2.9 billion in 2012. The Company invested in 2012 CHF 106 million in R&D, with over 1 000 specialists working on future products and services. In most areas, the operative businesses rank either first or second in their respective global markets.