KUKA statement on an application by Grenzebach for an extraordinary general meeting to be convened
On August 12, 2009, Grenzebach Maschinenbau GmbH, Hamlar, submitted an application to KUKA AG for an extraordinary General Meeting to be convened
12 August 2009
The application in accordance with §122 Para.1 of the German Stock Corporation Act was received by KUKA and is being subjected to an assessment of legality. Irrespective of this assessment, the chairman of the Supervisory Board and the Executive Board of KUKA AG herewith give their comments on the reasons given in the application.
Cost-cutting program and financing
The Executive Board recognized the effects of the economic crisis in good time (see KUKA presentation, November 4, 2008) and concentrated first of all on reducing risks and on cash management because of the high order backlog in the winter of 2008/2009. On March 12, 2009, a comprehensive cost-cutting program was published and the first level was implemented after this with consistency. The second level of the program was introduced on May 12, 2009. At the same time, the net debt was maintained at a stable level from September 30, 2008 to June 30, 2009, despite the drop in orders due to the general economic crisis. In addition, KUKA had already entered into discussions with the financing banks in the fourth quarter of 2008 regarding the upcoming extension of the syndicate loan. The negotiations to extend this loan, which expires at the end of 2010, are proceeding constructively. We are therefore confident that we will be able to agree an extension by the end of 2009.
As reported in the interim report for the half-year results 2009, the KUKA share has developed in-line with comparable mechanical engineering companies in Germany. Since July 2009, however, the development of the KUKA share price has been below the market average, mainly due to negative reports and rumors about KUKA and its Executive Board.
The Group`s strategic focus
The KUKA Group's strategy of "focus on General Industry" and "secure automotive business“ will continue to be pursued consistently and led during the first six months of 2009 to a rise in the share of KUKA Group's sales accounted for by General Industry from 24 percent (first half of 2008) to 29 percent (first half of 2009). The Executive Board also agrees with Grenzebach Maschinenbau GmbH on major features of the strategy (see joint press release from Grenzebach/KUKA as of March 27, 2009) and on the expansion of the growing business area of medical technology. For example, the company was awarded a large medical technology contract in the first half-year 2009.
Management personnell at KUKA Roboter GmbH
On February 4, 2009, the Executive Board parted company from the members of the management board of KUKA Roboter GmbH Bernd Liepert (Chairman) and Martin Sträb because of violations of compliance regulations. In addition, the Augsburg State Prosecutor is investigating the matter. The departure of Stephan Schulak, CFO of KUKA Roboter GmbH, was his own decision. This position has been filled internally. At the same time, the Executive Board has filled the position of chairman of the management board of KUKA Roboter GmbH as from September 1, 2009.
At the ordinary General Meeting of KUKA AG on April 29, 2009, two representatives of Grenzebach Maschinenbau GmbH were elected to the Supervisory Board. The Supervisory Board and Executive Board were approved at this General Meeting by more than 99 percent of the votes in each case. During the current year, there have been no complaints at Supervisory Board meetings about the execution of his office by the Chairman. At an extraordinary Supervisory Board meeting on July 20, 2009, confidence in the Chairman of the Supervisory Board was expressed unanimously and without limitation by the members of the Board (cf. KUKA press release as of July 20, 2009). In both votes, Grenzebach GmbH actively showed its approval of the Chairman of the Supervisory Board and the Executive Board members. The short period between the demonstration of confidence on July 20, 2009 and the application to convene an extraordinary General Meeting on August 12, 2009 is therefore surprising.
The Chairman of the Supervisory Board and the Executive Board find it strange that an investor holding less than 30% is seeking to gain control over a group on such a large scale without making the other shareholders a takeover offer.
The Chairman of the Supervisory Board and the Executive Board thus feel that the withdrawal of confidence is unjustified, for the reasons given above. They will continue, rather, to work constructively together with Grenzebach Maschinenbau GmbH for the good of the company.