LEAX Group concerned about future breaches of covenants due to Covid-19

(EN)

LEAX Group concerned about future breaches of covenants due to  Covid-19

With reference to the recent and accelerating negative effects of Covid-19 LEAX Group publishes additional information.
Most of LEAX Group’s customers have indicated considerable stoppages or disturbances in production in the near future. We have reason to believe that this will lead to difficulties for LEAX Group to fulfill the covenants and obligations set out in relation to the bonds (ISIN: SE0011088954) issued by the company, primarily with respect to the key ratio Adjusted Net Debt/EBITDA and the bond terms limiting the issuance of additional financial debt.

If covenants are indeed broken or if there is a need for additional debt, LEAX Group and our advisers will reach out to bond holders in the near term to discuss proposals for a joint solution.

The personnel, board and management of the company have successful experience from the severe downturn in the commercial vehicle space in 2008 – 2009. The measures referenced in the press release of 2020-03-19 and the company’s strong market position, not least in delivering solutions to electrical vehicles, give us confidence that LEAX Group will have a satisfactory level of profitability and leverage over time.

(SV)

Med referens till den senaste tidens accelererande negativa effekter av Covid-19 lämnar LEAX Group ytterligare information.

De flesta av LEAX Groups kunder har indikerat betydande produktionsstopp eller produktionsstörningar den närmaste tiden. Vi har anledning att befara att detta kommer att innebära svårigheter för LEAX Group att uppfylla de covenanter och åtaganden som ställts upp i samband med utgivandet av bolagets obligationslån (ISIN: SE0011088954), framför allt då avseende nyckeltalet Adjusted Net Debt/EBITDA och de begränsningar obligationsvillkoren sätter på bolagets möjligheter att ta upp ytterligare lån.

Om brott mot covenanterna faktiskt sker eller behov av ytterligare lån uppstår avser LEAX Group och dess rådgivare att i närtid återkomma till innehavare av bolagets obligation för att diskutera förslag på en gemensam lösning.

Bolagets personal, styrelse och ledning har framgångsrika erfarenheter från fordonsbranschens kraftiga nedgång 2008 – 2009.  De åtgärder som kommunicerades i pressmeddelandet 2020-03-19 och bolagets starka marknadsposition, inte minst inom leveranser till eldrivna fordon, ger oss all anledning att tro att LEAX Group har tillfredsställande lönsamhet och skuldsättning på sikt.

Henrik Fagrenius, President & CEO

E-mail: henrik.fagrenius@leax.com

 

About LEAX:
LEAX Group AB (publ) is the parent company of a group (“LEAX Group”) with about 1 200 employees. LEAX has operations in Köping, Falun and Falköping in Sweden, Riga and Rezekne in Latvia, Curitiba in Brazil, Detmold in Germany, Mezökövesd in Hungary and Wuxi in China. The company is a manufacturer of mechanical components and subsystems for the heavy vehicle industry, passenger cars, mining and construction industries and other engineering industries. LEAX Group also delivers customized gearboxes for various mechanical engineering industries. The Group have a turnover of more than SEK 1,8 billion on a yearly basis.