Swiss National Bank saves bank note materials maker (updated)
21/12/2017 08:12
(Adds detail)
By John Revill
ZURICH, Dec 21 (Reuters) - The Swiss National Bank SNBN.S
said it was buying a majority stake in a maker of materials for
banknotes and passports, to safeguard production and prevent its
new bank notes running out.
In its first acquisition in decades, the central bank said
it was purchasing a 90 percent stake in Landqart AG after the
company -- which makes the polymer material used in new 10-franc
notes, among others -- got into financial difficulties.
"The SNB has decided to acquire the company because,
otherwise, issuance of the new Swiss banknote series would not
have been guaranteed across the entire production stream," the
SNB said.
The SNB said the remaining 10 percent would be bought by
printing and publishing company Orell Fuessli Holding OFN.S ,
with the two companies paying a combined 21.5 million francs for
Landqart.
The deal came about after an overseas customer unexpectedly
cancelled an order with Landqart, which employs 250 people,
leading to a big drop in sales and cash flow problems.
The company reduced workers' hours to deal with the crisis,
which the SNB said posed a "direct and existential threat" to
Landqart's survival.
The company, which was a subsidiary of Canada's Fortress
Paper, is important to the SNB because it makes the Durasafe
substrate used in the latest series of Swiss bank notes.
The substrate is a three-layered paper which on the 10-franc
note launched earlier this year has security features including
a translucent Swiss cross, ultraviolet fibres and a shimmering
globe to safeguard against forgeries.
The SNB has launched new 10, 20 and 50-franc bank notes in
the past 18 months as part of its redesign of the currency. It
is due to launch new versions of the 100, 200 and 1,000-franc
notes in the next two years.
The SNB said Landqart would be provided with enough funds to
ensure its survival.
"By taking this step, the SNB is ensuring the continued
supply of cash and hence, the fulfilment of its own statutory
mandate," the SNB said.
($1 = 0.9861 Swiss francs)
(Reporting by John Revill; Editing by Brenna Hughes Neghaiwi
and Catherine Evans)
((John.Revill@thomsonreuters.com; +41 58306 7022; Reuters
Messaging: john.revill.thomsonreuters.com@reuters.net))
Keywords: SNB ACQUISITION/NOTES