Precious Woods Holding Ltd.

EANS-Adhoc: Precious Woods Holding Ltd. /

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Company Information

01.10.2010

Message to our shareholders/Press release

Supportive measures to increase operational resultsefficiency through bridge financing and an improvement in our the ability to access the capital market

Precious Woods is investing in a far-reaching restructuring of the company in order to achieve satisfactory operational results as quickly as possible. As indicated previously in the reporting for the first half year of 2010, these changes are taking longer than planned. In this regard, external forces suchfactors like the political and legal complexities in Brazil and Gabon also play a role. The path taken since the middle of 2009 towards achieving increases in operational efficiencyproductivity along with improved market and customer orientation has been judged to be promising by the Board of Directors and by Management. For 2011 we efforts will be made are striving to achieve a significant improvement in our the operating result so break-even we can be reached break-even as quickly as possible.

As it continues on this path, Precious Woods remains committed to its high ecological and socially responsible targets (FSC certification). Investments are being planned carefully and being made in a targeted way, for example in the new sawmill in Bambidie (Gabon) for the processing of valuable hardwoods - a reaction to the ban on the export of logs abruptly imposed by the government there.

Bridge financing The protracted implementation of the measures introduced has led the Board of Directors to improve the liquidity of the Group by means of two loans from current shareholders in the amounts of CHF 2 million and CHF 5 million. Both loans, which run for four years, are based on the same conditions: they have an interest rate of 6.25% and can be converted into Precious Woods shares within the scope of a capital increase. The Board of Directors is very grateful to both lenders for their commitment.

Improvement in our ability to access the capital market Looking ahead to the turnaround that is in progress as well as the strategic development of the Precious Woods Group and the related investments in the foreseeable future, the Board of Directors has also decided to propose a capital increase whereby the subscription rights of all shareholders will be ensured. Due to legal and statutory regulations, an increase in the capital of the company is possible only if the issue price of new shares is at least the same as their nominal value. The nominal value of a Precious Woods share is currently CHF 50.00; the price on the stock market is fluctuating in the neighbourhood of CHF 30.00. Under these requirements, it is therefore at present not possible for Precious Woods to issue new shares. Therefore, the nominal value must be reduced enough so it drops to a level below the stock market price. In that way, the company's ability to access the capital market will be ensured. The reduction in the nominal value of the Precious Woods share also enables our the lenders to convert both of the aforementioned loans at a fixed conversion price of CHF 35.00 once the reduction in the nominal value is recorded in the commercial register. A reduction in the nominal value has no effect on the intrinsic value of the company because the reduction amount is being allocated to the reserves. This measure gives Precious Woods the necessary flexibility to carry out a capital increase under favourable market conditions while also ensuring the subscription rights of the current shareholders.

The Board of Directors will call an Extraordinary General Meeting in the near future due time (bitte überprüfen ob korrekt) to allow for a vote and a discussion and a vote on this reduction in the nominal value in relation the context of to the strategic orientation of the company.

For more information please contact: * Ernst A. Brugger, Chairman of the Board of Directors (contact:    ) * Cornelia Gehrig, CFO (contact:    )

Precious Woods Holding AG, Corporate Communications Tel.: +41 44 245 81 20, Fax: +41 44 245 81 12, media@preciouswoods.com

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ots Originaltext: Precious Woods Holding Ltd.
Im Internet recherchierbar: http://www.presseportal.ch

Further inquiry note:
Precious Woods Holding Ltd.
Militärstrasse 90
CH-8021 Zürich

Branche: Forestry & Timber
ISIN:      CH0013283368
WKN:        982280
Index:    SPI
Börsen:  SIX Swiss Exchange / Main Standard



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