Original-Research: DEMIRE AG - from NuWays AG

Classification of NuWays AG to DEMIRE AG

Company Name: DEMIRE AG
ISIN: DE000A0XFSF0

Reason for the research: Update
Recommendation: Halten
Target price: EUR 1.20
Target price on sight of: 12 months
Last rating change:
Analyst: Philipp Sennewald

DEMIRE reaches agreement with bondholders

Yesterday, DEMIRE released an ad-hoc stating that the company has reached an agreement with a group of bondholders (ad-hoc group), who represent the majority of the outstanding principal amount of the bond (€ 499m). It is aimed to close the agreement as soon as possible. Here are the key components of the agreement:

DEMIRE will perform a partial redemption of the bond at par to the tune of € 49.9m.

The maturity of the bond will be extended until 31 December 2027 at an increased 5% annual cash interest (prior: 1.875%) with an additional 1% PIK interest starting on 1 January 2027.

Moreover, it is currently intended that shortly after the early redemption of the € 49.9m, DEMIRE will launch a tender offer to all holders of the bond to repurchase a maximum of € 209.3m of the remaining principal at a maximum price of 76.25%. There are already backstop commitments provided by members of the ad-hoc group for a large part of the maximum amount. DEMIRE will pay all bondholders who participate in the backstop a fee of 5%. The total discount at full utilization would hence amount to € 39.3m.

In order to finance this, DEMIRE’s majority shareholder Apollo agreed to grant a shareholder loan of maximum € 100m but at least € 68.3m, which will be provided at arms’ length terms. The remainder of the required funds will be provided by DEMIRE’s existing cash funds.

On top of this, Apollo has undertaken measures allowing DEMIRE to free up additional liquidity, which is currently allocated to the development of certain property companies (up to € 120m). This could include a transfer of the respective entities into an entity controlled by Apollo.

The company also provided an asset disposal program comprising 17 assets (incl. LogPark) which should generate total net proceeds of € 220m (8% discount assumption) until 2026.

While it is most certainly good news that DEMIRE finally solved its refinancing issue, the agreement represents a great burden to the operating business of the company for the years to come.

We hence reiterate to HOLD at an unchanged PT of € 1.20 and further keep our estimates unchanged
until the closing of the agreement.

You can download the research here:
http://www.more-ir.de/d/29985.pdf
For additional information visit our website www.nuways-ag.com/research.

Contact for questions
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: [email protected]
LinkedIn: https://www.linkedin.com/company/nuwaysag Adresse: Mittelweg 16-17, 20148 Hamburg, Germany ++++++++++
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