AgfaPhoto goes insolvent

The insolvency of AgfaPhoto has been announced.
AgfaPhoto has filed in Germany for insolvency. It is unclear at this time how it will affect operations worldwide.

Effective November 2, 2004, Agfa-Gevaert sold its consumer imaging business to a group of investors in a management buy out/in. Since then the consumer imaging business has been operated through a group of companies under the name of AgfaPhoto. The AgfaPhoto group is a private group of companies owned by management, NannO Beteiligungsholding and a small number of financial investors.

This sale followed on a fall of 18% of film in 2004 that tended to suggest ongoing cost problems for Agfa-Gevaert if they held onto this division. The sale has allowed Agfa-Gevaert to concentrate on its profitable operations, in areas like prepress.

Agfa-Gevaert provides AgfaPhoto group companies with distribution, order fulfillment, after sales and other services until the end of 2005.

In addition, at the time of the management buy out/in on November 2, 2004, Agfa-Gevaert granted a secured vendor loan for the full purchase price. Based on Agfa Gevaert’s audited financial statement, the purchase price was set at 112 million Euros, 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. AgfaPhoto Holding GmbH is not implicated in the insolvency filing of AgfaPhoto GmbH. Agfa-Gevaert therefore does not expect the insolvency filing by AgfaPhoto to have a material effect on Agfa-Gevaert.