Bundesliga-relegated Hertha fights for 2. Liga-Licence
Managing Director Thomas Herrich (59) must prove to the DFL by June 30 how the club intends to remain solvent next season. The biggest sticking point: a 40 million euro bond that is due to be repaid in November of this year.
Hertha has long since lost the money for the repayment. Most recently, it was discussed whether new investor 777 could help repay the bond. Now it should be different.
Now Herrich wants to postpone the repayment so that the million-dollar hole disappears from the books for the coming season. He proposes to bondholders that the bond be extended by two years until 2025.
Hertha offers bondholders higher interest rates
In return, the capital club offers a higher interest rate: 8.5 percent instead of the previous 6.5 percent interest. At 40 million euros, that would be 3.4 million euros a year that Hertha would have to pay the creditors.
Nevertheless, Hertha’s tense financial situation would improve. Only around 20 million euros would then have to be raised for the license, as the DFL is said to have recently demanded.
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The catch: Hertha needs the approval of the bondholders by June 19 to extend the bond. In addition, Hertha must present a concept of how they want to make the repayment in two years.
On Monday evening excerpts from a kind of strategy paper became known, with which the bondholders are apparently supposed to be convinced of an extension. In it, the new strategic partner, Investor 777, is presented in detail. It is said that the 100 million euros in equity that 777 intends to make available over the next few years is intended to create an “economic (…) turnaround”.
At the same time, Hertha explains that the DFL has not yet granted the license, mainly because the bond has not yet been repaid. The club raises the alarm: “If the issuer succeeds (Hertha; d.Red.) failing to meet these requirements, it is likely that the DFL will not grant the license to the issuer.”
Exciting: Hertha explains in the paper that the immediate resurgence is the goal from an economic point of view in coordination with 777.
Are the financiers going for it?
A dilemma, because the bondholders may face a total loss if Hertha is now unable to repay the bond. The price of the paper had already fallen by 20 percent since the 2018 issue. After Hertha’s plan was published, the price dropped further to 75.3 percent (as of 5 p.m.) – a sign that the capital market is critical of Hertha’s path.
Most recently, finance boss Herrich said about the fight for the license: “We are working flat out and confident that we will be able to do it.”
An important building block could now be the extension of the bond!
2023-05-22 21:38:16
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