Foodstuffs Struggling Hochdorf finds investor for operating business
The Hochdorf Group, which is in difficulties, is selling its operating business. The holding company goes into debt restructuring moratorium.
27.08.2024, 07:53
SDA
The Swiss-British private equity company AS Equity Partners has signed an agreement to acquire Hochdorf Swiss Nutrition (HSN), the Group announced on Tuesday. HSN will thus be separated from the Hochdorf Group and continue to operate under the new ownership. According to the press release, the Board of Directors decided to accept AS Equity Partners' offer to acquire HSN "after careful consideration of several sales options".
The agreement values Hochdorf's operating business at an enterprise value of CHF 83.0 million. However, Hochdorf still has an outstanding syndicated loan of CHF 67 million, which will be assumed by the buyer. After deducting this amount, 15.5 million Swiss francs will flow to Hochdorf Holding as sales proceeds, according to the press release.
According to an independent valuation report commissioned by the Board of Directors, this price is considered fair. However, the proceeds from the sale will not be sufficient to "settle the considerable financial burdens, in particular the hybrid bond issued in 2017 in the amount of 125 million as well as the associated outstanding interest payments", the press release continues.
In addition, with the sale agreement, the holding company will have to write off the intercompany loans granted to HSN years ago in the amount of CHF 182 million in full in the balance sheet as of the end of June 2024. This would lead to over-indebtedness in the individual financial statements of Hochdorf Holding. An application for a provisional debt-restructuring moratorium and the appointment of an administrator has therefore been submitted for the holding company.
Delisting planned
The competent court has approved the application and thus granted authorization to complete the transaction. However, the deal still has to be approved by the shareholders. Hochdorf has therefore convened an Extraordinary General Meeting for September 18, 2024.
The renaming of Hochdorf Holding and the delisting of the shares from the Swiss stock exchange will also be proposed there. In the half-year report, the management and the Board of Directors ask shareholders to approve the transaction.
They are aware that the decision is "not easy" for shareholders from a financial point of view, as the proceeds from the sale will not provide the holding company with sufficient funds to repay the debts from the senior hybrid bond, "let alone for shareholder claims". For shareholders and bondholders, this could lead to a total loss of their investment, which is extremely regrettable.
