May 2020

Argonas acts as sole debt advisor to Feuer Powertrain Group in expansion and adjustment of financing structure

FEUER powertrain Group („FPT“) headquartered in Nordhausen (Thuringia) is a globally leading independent manufacturer of crankshafts for passenger car, truck, agricultural vehicle and industrial engines as well as the segments sports & leisure vehicles (ATV, motorcycles, jetskis, sports boats, etc.) and compressors. Even though a large part of the current business is based on applications in the combustion engine segment, FPT still has growth opportunities from an accelerated outsourcing trend and the further diversification of its activities.

The outbreak of the Corona-crisis and the resulting almost complete shut-down of the majority of the international industrial production made FPT, like many other companies, significantly correct its short-term business outlook and face increased uncertainty regarding the recovery of the market and the corresponding earnings and cash flow effects.

Against this background, FPT postponed a broader reorganisation of its financing structure, which was originally planned for this year with a focus on financing further growth and optimization of the capital structure, and instead adjusted its financing structure by adding two new financing tranches to secure sufficient financing flexibility through the Corona crisis.

Thereby, the two new loans as part of the existing syndicated loan facility address both expected temporary as well as sustainable financing needs triggered by the Corona crisis. At the same time, the maturity of both the syndicated loan as well as a bilateral private placement was extended and an amendment of various financing terms was agreed with all financing partners, that ensures that FPT will remain in compliance with its financing contracts despite the Corona crisis. In this context, in particular a „covenant holiday“ was agreed for the main financial covenants, which in light of the current market uncertainties will temporarily not be tested and later be defined again appropriately on the basis of a reliable outlook on the market recovery post Corona.

In order to be able to flexibly take further financing measures and use market opportunities after the start of the recovery phase, even though the current focus is on financing stability, the adjusted financing structure furthermore includes selected provisions that allow to swiftly add additional financing components.

ARGONAS Corporate Finance Advisors acted as sole debt advisor to FPT and provided comprehensive advice and support on all transaction streams. Despite a large number of stakeholders and the specific challenges of a transaction process in the middle of the Corona crisis, the financing could be successfully closed with only a few weeks.