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Schaeffler Holding revokes bond redemption, to refinance later
New York, Oct. 5 – Schaeffler Holding Finance BV rescinded its planned redemption of all of its outstanding bonds and said the debt will be refinanced at some point in the future.
The company previously announced on Sept. 21 that it would redeem its €800 million of 6 7/8%/7 5/8% senior secured PIK toggle notes due 2018 and $1 billion of 6 7/8%/7 5/8% senior secured PIK toggle notes due 2018 issued in July 2013 and its €350 million of 5¾%/6½% senior secured PIK toggle notes due 2021, $475 million of 6¼%/7% senior secured PIK toggle notes due 2019 and $675 million of 6¾%/7½% senior secured PIK toggle notes due 2022 issued in October 2014.
It had scheduled the redemptions for Oct. 21.
The proposed redemptions were to be part of a new financing structure that included the placement of shares of Schaeffler AG by Schaeffler Verwaltungs GmbH, a subsidiary of INA-Holding Schaeffler GmbH & Co. KG, with institutional investors and also a new credit facility. The facility was to include a bridge tranche that would have been replaced by bonds at a future date.
However Schaeffler Holding on Monday announced it was reducing the size of the equity sale to 75 million shares from 166 million originally. The price target is €12.00 to €14.00 per share.
In the original transaction, up to 100 million of the shares were to be sold by Schaeffler Verwaltungs, a holding company for the Schaeffler family. The remaining 66 million shares were to be a capital increase.
With the change in the equity component, the refinancing will now be completed in stages.
In the first stage, Schaeffler Holding’s existing bank facilities totaling €700 million will be replaced by a new €800 million facility made up of a €200 million revolver and a €600 million term loan, both with a five-year maturity.
The Schaeffler Holding notes will be refinanced “at a later stage” and the bridge loan will no longer be needed.
Schaeffler is a Herzogenaurach, Germany-based supplier of automotive and industrial components.
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