Following the announcement dated June 26, 2007, in relation to the ongoing restructuring actions to reduce cost and improve profitability, M.J. MAILLIS S.A. informs investors of the following developments:
1. The restructuring of the commercial activities of the Group in four countries in Europe was completed. The commercial activity in the Netherlands was absorbed by M.J. Maillis Belgium NV, which was renamed to M.J. Maillis Benelux NV. The commercial activities in Sweden, Albania and Serbia through commercial subsidiaries were terminated and resumed through local distributors.
2. The merger of production entities and divisions in Italy was completed. Specifically, the production activities of automatic machines of M.J. Maillis Systems Srl and Mega Srl were absorbed by the Group's subsidiary Columbia Srl.
3. In order to reduce the number of the intermediate holding companies of the Group, all the holdings and other activities of Helero B.V. were transferred to the other holding company of the Group, Europack S.A.
4. Before completing above steps, the companies, whose activities were either transferred or terminated, proceeded with the repayment of their obligations to other Group companies and to third-party companies by utilizing their available cash (Albania, Helero) or through share capital increases (Serbia, Sweden, Netherlands) of a total amount of euro 5.5 million. The legal entities that remained with no activity in each of the above mentioned countries were sold or are about to be sold to third parties at their net book value.
The above actions were completed at a total cash outlay in the order of euro 200 thousand, and are expected to result in enhanced consolidated results for the Group, estimated at approximately euro 1 million annually. The company expects to derive such benefits by reason of the economies of scale achieved through the merging of activities and the anticipated positive effects to the total working capital of the Group. In parallel, the improved structure of the larger subsidiaries of the Group is expected to have a positive effect on such subsidiaries' own operations, as well as to those of the Group's headquarters.
The above restructuring will result in a one-off loss from impairment of participations on the books of M.J. MAILLIS S.A., as well as one-off goodwill write-offs and extraordinary expenses in the consolidated results of the Group for the first half of 2007, estimated at euro 6 million.
M.J. MAILLIS S.A. will proceed with further public announcements in respect of additional scheduled restructuring actions which are expected to be completed by the end of the 1st quarter of 2008, as per our original announcement.