Lenzing AG, a major fiber producer, announced a significant strategic transformation that includes the cessation of fiber production at its Heiligenkreuz, Austria, plant by the end of 2026 and its Grimsby, UK, site by the end of 2027. This move is part of an effort to consolidate its production footprint and shift focus towards nonwoven applications while repositioning its textiles business. The company aims to substantially grow its nonwovens business by 2030 and will transfer premium fiber production to its core manufacturing sites to ensure consistent customer supply.
This restructuring will lead to substantial job reductions, with the company’s global workforce, which stood at 7,700 full-time equivalents at the end of 2025, expected to decrease by approximately 2,000 positions by the end of 2027. Lenzing plans to sell its Heiligenkreuz site to preserve as many jobs as possible, and a buyer is being sought, with an estimated completion time of a few months. For Grimsby, Lenzing will completely withdraw from the business. Additionally, production at the Indonesian viscose site, PT South Pacific Viscose, is being scaled back to two lines, with an ongoing sale process for the facility.
Financially, Lenzing anticipates non-cash impairment losses of up to EUR 150 million ($163 million) in 2026 on non-current assets, particularly property, plant, and equipment. This charge will negatively impact consolidated EBIT and net income but not EBITDA. Furthermore, restructuring provisions for headcount reductions are expected to negatively impact EBITDA in 2026 by up to EUR 40 million ($43.5 million). The company is targeting an EBITDA margin between 20-25% and leverage below 2.5x in the mid-term.
To support this transformation, Lenzing has secured a comprehensive refinancing package totaling up to EUR 600 million ($652 million). This package includes a fully underwritten capital increase of up to EUR 300 million ($326 million), subject to shareholder approval at an extraordinary general meeting around August 25, 2026, and new financing agreements of up to EUR 300 million ($326 million). Key shareholders, including B&C Group and Suzano (indirectly holding 52.25%), have committed to participating in the capital increase by investing up to EUR 156.7 million ($170 million), and Oberbank AG (3.86%) will invest up to EUR 11.6 million ($12.6 million). International banks have also committed to subscribe for any unsubscribed shares.
