More than the required two-thirds majority of Carl Zeiss Vision's lending banks have OK'ed the reorganization of the corporate financing of the eyeglass lens manufacturer, and they have shown a higher than expected eagerness to convert some of their loans into shares that would then be bought by the Carl Zeiss AG holding company.

Michael Kaschke, a member of Carl Zeiss AG's executive board who will become its president and chief executive on Jan. 1, said that the company will discuss the purchase of the oversubscribed portion of the cash offer with its supervisory board. He has been acting as the main negotiator in the discussion with the banks.

The company and its two equal shareholders, Carl Zeiss AG and EQT, the private equity firm, had proposed that Carl Zeiss AG would become a majority shareholder of the German company in return for the injection of new equity into CZV and the purchase of some of the outstanding loans. Carl Zeiss said it was prepared to invest a total amount of three-digit-millions of euros.

Reports indicate that the Zeiss holding company was prepared to inject between €200 million and €300 million into the business, reducing its debt by a similar amount. Five years ago, when CZV acquired Sola International, EQT acquired 50 percent of the company for €820 million, and this amount was largely charged to CZV's debt.

The talks with the lenders had become necessary because CZV had breached some of the loan covenants during the 2008/09 financial year. Zeiss points out that all the required capital and interest payments were made regularly, and there were no defaults, but a restructuring of the corporate financing was deemed necessary. EQT had previously agreed to contribute €35 million to an equity increase, but this time it preferred to hold its shares and become a minority shareholder.

The new financial arrangement will take effect for Carl Zeiss AG and Carl Zeiss Vision from the balance sheet for their 2010-11 fiscal year, which starts next month.