Commenting on the proposed capital increase, Heidelberg chief executive Bernhard Schreier said: "With this initiative, the board intends to increase the company's flexibility in accessing sustainable and independent capital market financing."

The rights issue, which will be put to a vote at a shareholders meeting on 29 July, follows publication of the company's results for the 2009/10 financial year, which revealed the extent to which investment has nosedived in the industry during the recession.

The world's largest press manufacturer posted a 23.1% drop in sales, to €2.3bn, coupled with an 18.4% fall in incoming orders, to €2.4bn. Order backlog was also down, falling 8.3% to €596m, although the pre-tax result improved from a €347m loss to a €286m loss.

Despite the completion of its restructuring efforts, which centred on 4,000 job cuts in the past two years including 2,400 in the last 12 months, Heidelberg has yet to hit a break-even operating result, and recorded a €130m operating loss for the year (excluding special items).

The company said it expected to hit break-even in 2010/11, although it added that high financing costs would continue to burden its financial result, leading to expectations of another net loss in 2010/11 (following its €229m net loss in 2009/10 and €249m net loss in 2008/09).

On the plus side, Q4 showed some signs of positivity returning to the market and, while sales were still down 9.3% for the quarter at €715m, incoming orders shot up 43% to €678m on the back of particularly strong performances in Eastern Europe and Latin America, where orders rose 156.7% and 194.4% respectively.

Heidelberg chief executive Bernhard Schreier said: "The financial and economic crisis has hit the Heidelberg Group hard, but we have been able to strengthen our leading market position.

"What's more, we have restored the group's financial stability and lowered the break-even threshold considerably. The reorganisation has adapted and optimised all our structures in line with the changed market environment, so that we can once again enjoy profitable growth in the future."

In addition to the €400m annual cost savings achieved in the year under review, Heidelberg said that it had identified addition annual savings of €80m, €60m of which are set to be achieved by 31 March 2011.

The company also announced the completion of its restructure into three divisions, Heidelberg Equipment, Heidelberg Services and Heidelberg Financial Services, on 1 April 2010.