Restructuring – Ekotechnika AG

Background:

As a result of the Russian economic crisis and the ensuing slump in the rouble, Ekotechnika AG, the German holding company of the EkoNiva-Technika Group, the largest dealer of international agricultural machinery in Russia, suffered a sharp drop in sales in 2014 and 2015. The resulting crisis called for a fundamental financial restructuring exercise. The restructuring concept revolved around a 100% debt-to-equity swap of the EUR 60 million corporate bond issued in 2013. The company took advantage of the restructuring options available under the German Bond Act of 2009, which requires the consent of the bondholders‘ meeting.

Task and result:

IR.on was instrumental in the company’s restructuring process and advised the management in the fields of corporate communications and investor relations (IR).

Prior to the bondholders’ meeting, 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. 

Ekotechnika obtained the necessary approval of the financial restructuring from the respective stakeholders thanks to an ongoing and transparent dialogue with investors, banks and bondholders. The subsequent swap capital increase for the company’s new shares in autumn 2015 was completed successfully and oversubscribed 2.5 times. The shares were admitted to the primary market of the Düsseldorf Stock Exchange in December 2015. With the Russian economy recovering, the company’s business has since stabilised, which is also reflected in the positive performance of the Ekotechnika shares.

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