Mon Mar 1, 2021 8:48 pm High Yield Bonds

New coverage from our EMEA Middle Market by Reorg team takes a look at Paragon GmbH & Co KGaA and their bond’s recent double digit rise as well as the company’s plans to repay their liabilities and invest in the automotive business. Paragon, a German automotive supplier, has recently sold a stake in its subsidiary Voltabox which has given investors reason to monitor the company’s bonds. Since the beginning of February the Swiss Franc bond rose to 55, while the Euro bond gained 15 points to rise to about 75. These bonds are hardly trading, but a Swiss investor in Voltabox may reach up to 32% of the company’s share capital ownership as they look to purchase more than 18% of Voltabox’s shares upfront. Paragon expects to retain a small stake of Voltabox for some time before exiting the investment completely, but the asset sale proceeds will be used to invest in the automotive business and repay liabilities. 

The company had a bumpy 2020 in terms of financial performance. In the first three quarters Paragon had an 11.6% year-over-year decline in revenue, pushing the company down to €83.84 million. The company’s EBITDA also fell to €7.5 million, which was a 11.2% decrease. These decreases were mainly driven by six-week automotive plant closures in the first and second quarter of 2020 due to Covid-19. Read our EMEA Middle Market by Reorg team’s full analysis of the Paragon situation here:

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