(Corrects company name to Heidelberger throughout, not Heidelberg, corrects company RIC)
* Banks on firepower from cash call, recovery prospects
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(Recasts lead, adds details, background)
By Christiaan Hetzner
FRANKFURT, Aug 10 (Reuters) - Struggling printing press maker Heidelberger set out a future as an independent manufacturer, backed by the firepower of a 420 million euro rights issue and the prospects of recovery from improving currency trends.
The world's top supplier of printing presses was rescued by a government loan last year and came under pressure from key shareholder Allianz to join a sector consolidation drive.
But suitor manroland, the world's second largest manufacturer, abandoned merger plans after losses at Heidelberger unexpectedly ballooned.
Heidelberger management has shown no signs of revisiting merger scenarios that would be fiercely opposed by German unions and be met with suspicion by cartel regulators.
Chief Executive Bernhard Schreier told a second-quarter earnings conference call on Tuesday he would keep clear of any potential merger discussions within the industry, which has been buffeted by a shift to online media in core western markets.
When asked to confirm that Heidelberger was not involved in consolidation stalks at present, he replied: "The statement is correct the way you just made it."
"I've always said our industry would do well with a consolidation, regardless of where, since all would profit," he said.
"So I am very interested to see what happens in the future," he said.
In Tuesday's Handelsblatt newspaper, Koenig & Bauer (KBA) CEO Helge Hansen publicly wooed manroland while ruling out any interest in a deal with the larger, heavily indebted Heidelberger.
"Any deal involving Heidelberg would be so problematic from a cartel point of view that it would likely only proceed if the companies were in an existential crisis. But now the bottom has clearly been reached and the trend is pointing up," said one sell-side equity analyst based in Germany.
Investors including Allianz last month approved a capital hike to bolster Heidelberg's balance sheet. The capital increase is due no later than January.
One person familiar with the matter said Allianz had decided not to conduct any discussions over mergers at present.
"It's not the right time for an exit," the source said.
FLAGGING U.S.
Considered a bellwether of the German capital goods sector, a strong euro meant Heidelberger struggled to overcome flagging demand in the United States.
But with Japanese competitors like Komori and Mitsubishi Heavy suffering from a strong yen, Heidelberger says it can now afford to watch a wave of consolidation from the sidelines.
"For three, four years the yen was trading at 150-170 (to the euro), where we had a considerable handicap to compete for customers on the price," finance chief Dirk Kaliebe.
"With the economy recovering, the Germans (Heidelberger, manroland and KBA) have a competitive advantage," he said.
Schreier said there was one market that was not ramping up its orders despite 2010 being an election year that typically boosts demand for printed material: the United States.
"For the next three, maybe even six months, I do not see any real improvement there even though all other regions of the world are developing dramatically better," he explained.
Heidelberger expects to break even on an operating level in the current 2010/11 fiscal year, but will see a "significant" net loss due to higher costs resulting from refinancing a low-rate convertible bond with expensive state loan guarantees.
(Additional reporting by Alexander Huebner; Editing by David Cowell)