Heidelberg steps towards financial stabilization

Heidelberg to repay bond earlier than 2022 maturity

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Heidelberg demonstrates commercial and package printing at the Print Media Center in Wiesloch Photo Heidelberg
Heidelberg demonstrates commercial and package printing at the Print Media Center in Wiesloch Photo Heidelberg

Heidelberg is setting the next milestone in its ongoing financial stabilization and transformation process. The company announced on 7 August 2020 that it will pay back the remaining amount of € 150 million on the existing high-yield bond (HYB), which has a term to maturity until 2022 and a coupon of 8% per annum plus accrued interest before maturity, i.e., on 9 September 2020. The payback will be funded from cash reserves and will unburden the financial result by approximately € 12 million per year.

After the transfer of € 380 million in funds to the company from Heidelberg Pension-Trust e.V. in March this year for refinancing and transformation, and the sale of the Gallus Group at the end of July 2020, Heidelberg will make the announced early repayment of the high-yield bond without delay.

“We are keeping our word and are working full speed ahead to consistently implement the measures announced in the program we presented in March to increase profitability, competitiveness and to secure our future. The early repayment of the high-yield bond is a further milestone in improving our financing structure. We are permanently freeing ourselves from high-interest payments and are becoming more financially independent and flexible,” says Marcus A. Wassenberg, CFO of Heidelberg. Rainer Hundsdörfer, CEO of Heidelberg, explains: “And this gives us leeway for future investments and to shape the future of our company.”

After the envisaged buyback of the high-yield bond, Heidelberg continues to have a stable financial framework, among other things, due to a syndicated credit line, which is agreed until 2023.

Under the bond conditions, the repayment on 9 September 2020 will take place by means of a publicly announced optional early redemption with a redemption value of 100 % plus accrued interest. The announcement of the buyback can also be viewed directly on the website of the Luxembourg stock exchange.

The Covid-19 pandemic led to the country-wide lockdown on 25 March 2020. It will be two years tomorrow as I write this. What have we learned in this time? Maybe the meaning of resilience since small companies like us have had to rely on our resources and the forbearance of our employees as we have struggled to produce our trade platforms.

The print and packaging industries have been fortunate, although the commercial printing industry is still to recover. We have learned more about the digital transformation that affects commercial printing and packaging. Ultimately digital will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future.

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