With support from IR.on AG, DF Deutsche Forfait AG (Prime Standard) and bond issuer Ekotechnika GmbH (BondM) have reached important milestones on their way to a successful restructuring over the past weeks.
IR.on assists both companies in the restructuring process and advises their respective management teams with regard to corporate communications and investor relations (IR).
DF Deutsche Forfait had been put on the sanctions list of an agency of the US Treasury last year, which had a dramatic impact on the operations of the foreign trade finance company. The 8-month US listing led to a sharp drop in equity capital, which made a financial restructuring necessary. This affected all of the company’s lenders, including the holders of the bond 2013/20, which were asked to waive their claims to interest.
Ekotechnika GmbH had to restructure its balance sheet as a result of the sharp drop in sales revenues resulting from the economic crisis in Russia and the depreciation of the rouble. The key elements of the restructuring of the agricultural equipment dealer include a 100% debt-to-equity swap of the EUR 60 million corporate bond issued in 2013.
Both companies take advantage of the restructuring possibilities granted under the new German Bond Act of 2009, which subjects them to the official procedure requiring the consent of the bondholders‘ meeting.
For DF Deutsche Forfait, the main challenge for the crisis communication and IR activities was to address the lack of information after the company was removed from the sanctions list in order to restore confidence in the company. The lack of information was due to the fact that the company was forced to restrict its external communication while the negotiations with the US authorities were underway so as not to jeopardise the attempts to find a solution. After the removal from the list, the management published press releases and interviews to explain the measures taken and the financial effects of the crisis and prepared investors for the necessary cuts. The challenge was to make the company’s complex restructuring concept comprehensible and to secure the majorities required for the necessary capital measures and for bondholders’ interest waiver at the Annual General Meeting and the bondholders’ meeting.
As a result, both companies obtained the necessary approval of the financial restructuring thanks to an ongoing and transparent dialogue with investors, banks and bondholders.
Prior to the bondholders’ meeting of Ekotechnika GmbH the communication with investors focused on an explanation of the reasons for the company’s financial problems resulting from the Russian crisis. It was particularly the large percentage of private investors among the bondholders which required a continuous information policy characterised by regular press releases, interviews, investor mailings and the use of the company’s website as a central platform for communication.
As a result, both companies obtained the necessary approval of the financial restructuring from the respective stakeholders thanks to an ongoing and transparent dialogue with investors, banks and bondholders.