Heidelberg has proposed a rights issue to raise approximately €420m ($546m) following the publication of mixed results for the financial year to 31 March 2010.

The world's largest press manufacturer said it intended to use the proceeds of the capital increase to "mainly repay a portion of the three bank loans Heidelberg was granted in June/August 2009 to support the group's financial restructuring".

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.

Heidelberg 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, Heidelberg has yet to hit a break-even operating result, recording 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 net financial result.

Heidelberg said it had identified additional annual savings of €80m.