KION Group plans revolver draw, new loan to retire €525 million bonds

By Susanna Moon

Chicago, April 2 - KION Group AG said it plans to retire €525 million of bonds using proceeds of a drawdown on an existing revolving credit facility and from a further bank loan of €200 million.

The company plans to repay its €325 million of 7 7/8% secured corporate bonds due 2018 and €200 million of secured corporate floating-rate bonds due 2020 on April 15, according to a company press release.

Interest on the floaters is Euribor plus 450 basis points.

"This step will lower our interest payments and give us greater flexibility with which to pursue implementing our growth strategy," Thomas Toepfer, KION Group's chief financial officer, said in the press release.

KION said it expects to save more than €20 million per year in interest payments.

Under the terms and conditions of the bonds, early repayment charges of about €15 million must be paid. This amount, along with the reversal of the capitalized borrowing costs of around €8 million, will be recognized as one-off financial expenses in the second quarter.

Once the bonds have been repaid, the company's long-term borrowing will comprise the €450 million of fixed-rate corporate bonds due 2020, the revolving credit facility of €1,045,000,000 due 2018 and the new bank loan of €200 million maturing in 2019.

KION is a Wiesbaden, Germany-based provider of industrial and warehouse equipment and other material handling equipment.

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