Business News

Hidria Hopes for Debt Restructuring Deal by Early 2015

Ljubljana, 03 November (STA) - Industrial conglomerate Hidria is in intensive talks with creditor banks on restructuring of its debt, which is estimated at EUR 150m. The management expects that the negotiations will be concluded successfully in the first quarter of 2015 or even earlier.

The Hidria group, which employs around 2,400 people, is expected to finish 2014 with EUR 260m in sales revenues, while its debt stands at EUR 150m or six times the earnings before interest, taxes, depreciation, and amortisation (EBITDA) expected for this year.

Hidria executive director Iztok Seljak told the press in Ljubljana on Monday that the conglomerate's short-term debt stands at around one-third of the total debt, which he said was excessive.

According to him, a due diligence carried out by Pricewaterhousecoopers has shown that the conglomerate is able to increase its sales revenues to EUR 350m in three to five years. Seljak expects that it will be able to reduce debt in a year or two to an equivalent of five times EBITDA.

As the company also wants to improve operational management as part of the restructuring, it recently hired award-winning manager Christof Droste.

Droste, formerly the boss of the German-owned car lighting maker Hella Saturnus and manager of the year 2011, will be in charge of operational excellence and restructuring. "This is a great combination and I'm happy that it has been realised," Seljak said.

Droste, who worked in the Hella group for 25 years, is convinced that after restructuring Hidria will be able to service its debt properly and that it will emerge from the current situation even stronger.

Also to help the conglomerate deleverage is the EUR 24m deal recently signed with the French group PSA Peugeot Citroen. Hidria will develop and supply steering system parts for Citroen C3, Citroen DS3 and Opel Meriva through 2023.

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