With support from IR.on AG, SANHA GmbH & Co. KG, a leading manufacturer of pipe systems and fittings for the plumbing, heating and cooling (PHC) industry, successfully extended the maturity of its corporate bond in the amount of approx. EUR 37 million by another five years already nine months prior to maturity.
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Cologne, 5 October 2017 – Other conditions of the issue were amended as well, e.g. the interest rate was reduced by an average 75 basis points, repayment was made more flexible and the company secured the right to call the bond prematurely. With a view to strengthening noteholders’ confidence in SANHA, the company has posted additional collateral and agreed to certain financial covenants for the extended term of the bond.
Under the German Act on Debt Securities (Schuldverschreibungsgesetz), the maturity extension required the consent of the noteholders’ meeting. As had been expected, a first vote without meeting failed to reach the required quorum of 50%. A quorum of 25% of the outstanding notes and a 75% majority for the resolution proposal were required for the second noteholders’ meeting on 15 September 2017.
Consequently, a major challenge for the communication was to motivate a sufficient number of noteholders in order to reach the required quorum. The high free float required a broad-based and continuous information policy including regular press releases, interviews, investor mailings as well as the use of the corporate website as a central communication platform.
On the basis of the communication strategy developed by IR.on, it was also important to assert dominance in the public debate with the opponents to the plans and to explain the motives for the proposed refinancing in direct dialogue with institutional and private investors.
This transaction was the eighth consulting project successfully completed by IR.on AG in the area of bond refinancing and restructuring in the past two years.
In order not to jeopardise the success of the transaction and to reach the required quorum, an amended extension concept was developed in close coordination with several major noteholders and was put to vote at the meeting.
At the noteholders’ meeting on 15 September 2017, the amended resolution proposal was accepted by a large majority of over 99% of the noteholders, thereby extending the maturity of the bond by another five years until 2023 and lowering the interest rate by an average of 75 basis points.
This transaction was the eighth consulting project successfully completed by IR.on AG in the area of bond refinancing and restructuring in the past two years.
