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SANHA plans to extend 2013/2018 corporate bond

SANHA GmbH & Co. KG, a leading manufacturer of pipe systems and fittings for the plumbing, heating and cooling (PHC) industry, continues to rely on the capital market and has proposed to its bondholders to extend the 2013/2018 corporate bond (ISIN: DE000A1TNA70) by another five years until 2023 one year prior to maturity. The key aspects of the proposed refinancing scheme ...


...include real estate as collateral for the bondholders, annual repayment of the corporate bond in the amount of 10% of the present bond volume starting 2019 and a coupon of 5.5% p.a. as of the commencement of the extension in June 2018. Moreover, the company plans to switch to semi-annual interest payments on 4 June and 4 December of each year. The corresponding first vote without meeting will commence on 25 July and end on 31 July 2017.


  • Independent expert opinion confirms plausibility of the company’s plans and the repayment scenario for the bond
  • Investments of the past four years in machinery and product innovations have helped to strengthen the business model
  • Measures to increase the profitability and adjust the product range to the changing market have been implemented
  • Market position as Germany’s No. 3 and Europe’s No.4 remains strong
  • 2016 consolidated financial statements: Sales revenues of EUR 99 million and improved EBITDA margin of 8.5%
  • Objectives for 2017 confirmed: Moderate revenue growth and EBITDA margin of 10%

 As announced in late May 2017, the management of SANHA GmbH & Co. KG has concluded talks with potential partners to refinance the 2013/2018 corporate bond and has decided to stay in the capital market and to extend the bond by five years upon maturity in June 2018 until June 2023; at the same time, the terms and conditions of the bond will be amended. Bondholders will be offered collateral in the form of land charges registered in the land register of close to EUR 10 million, and a reduced coupon of 5.5% p.a. starting 4 June 2018 will be proposed.

The collateral granted to the bondholders will improve their position as of the time the resolutions are put into practice. Moreover, the refinancing scheme provides for annual repayment of the bond from the cash flow in the amount of 10% of the present bond volume (approx. EUR 3.7 million) starting December 2019 as well as for semi-annual interest payments. The decision to extend the bond was taken after thorough examination of different refinancing options, not least because it allows the refinancing of the existing bond to be initiated already 12 months prior to maturity. In the event of other debt capital measures, this would have entailed additional financial expenses given that the company is not allowed to call the bond prematurely. 

Says Bernd Kaimer, Managing Partner of the family-owned company: “We are convinced that the proposed measures represent a fair and balanced concept. The collateral and the repayment structure of the planned 2013/2023 bond reduce bondholders’ risk significantly while at the same time still ensuring an attractive coupon. Over the past four years, we have invested some EUR 23 million in the modernisation of our plants, new production technology, the expansion of our product range as well as our sales organisation and the optimisation of processes. This investment programme has helped to strengthen our market position as the No. 3 in Germany and the No. 4 in Europe, while our competitors are still challenged to make part of these investments (change to lead-free products made from copper alloys). However, when we made our plans at the time of the bond issue in June 2013, we expected a quicker return on investment and have had to correct our assumptions regarding individual markets and products in the meantime. For instance, the unexpectedly strong structural change in the PHC industry (concentration of wholesalers, shortage of skilled labour) has put a damper on our sales revenues in Germany. Moreover, the changeover to lead-free products resulting from the EU-wide stipulation of lower lead limits in drinking water has been slower than planned. But after the completion of these necessary investments, we are well positioned – even based on conservative revenue projections – to generate constant two-digit EBITDA margins and clearly positive operating cash flows over the next five years, which will allow us to repay the bond as planned between 2019 and 2023.“ 

To support the plausibility of these objectives, SANHA has asked renowned management consultancy Pluta Management GmbH to review the company’s plans and projections in the context of an Independent Business Review (IBR). The report arrives at the conclusion that SANHA will generate sufficient cash to service its debt between 2018 and 2023 and to fully repay the bond in 2023 even based on management’s conservative plans. 

Vote on extension from 25 July to 31 July 2017

To vote on the extension and the other measures of the refinancing scheme of the 2013/2018 bond, the company has asked the bondholders, in accordance with the terms and conditions of the bond, to cast their votes in a vote without meeting between 25 and 31 July 2017. The invitation to vote, together with the relevant voting documents, will be available in German in the “Anleihe” section on the website of SANHA GmbH & Co. KG as of Friday, 23 June, and will be published in the Federal Gazette on Monday, 26 June 2017. 

Publication of 2016 consolidated financial statements

As had been announced, SANHA has today published its consolidated financial statements for 2016. Sales revenues amounted to approx. EUR 99 million (previous year: EUR 105.3 million). Earnings before interest, taxes, depreciation and amortisation (EBITDA) totalled EUR 8.4 million (previous year: EUR 7.5 million), which represents a margin of 8.5%. Earnings before interest and taxes (EBIT) improved to EUR 2.7 million (previous year: EUR 1.7 million) and net income for the year after taxes stood at EUR -1.6 million (previous year: EUR -2.3 million). After completion of the major investments, SANHA’s management has initiated a comprehensive set of measures aimed at strengthening the company’s profitability and further reducing its costs in order to achieve a sustainable turnaround in net income after taxes. Based on the operating performance in the first five months of the year, management has confirmed its forecast for 2017, which projects revenues of slightly more than EUR 100 million and an EBITDA margin of 10%. The full consolidated financial statements for 2016 are available in German in the “Anleihe” section of the company’s website.