Press release: Questions and Contributions Submitted at the Investor Conference on 31 January 2022
paragon GmbH & Co. KGaA, together with its advisors, has evaluated the questions and contributions submitted at the investor conference on 31 January 2022. As many of the questions concerned the same issues, the company has decided to answer them in blocks. Any unobjective comments received have been disregarded.
As a reliable partner on the capital market, the company has made a conscious decision to extend the existing euro bond for a further five years. Having thoroughly examined several alternatives, this is the best solution in the interest of the bondholders and in line with paragon's business development. After all, the interests are aligned here: paragon is on a profitable growth path, has rid itself of all legacy issues and will benefit noticeably from the megatrends in the industry. For bondholders, this continues to mean attractive interest rates for an investment in paragon, which is visibly deleveraging and growing profitably.
In light of the positive feedback received in recent weeks and especially the feedback from the recent investor events, paragon is convinced that it has made the right decision with an extension of the term instead of a new issue. An exchangeable bond was discussed internally, but was ultimately not considered due to the significantly higher costs involved.
Given the significantly lower commitment of the banking world over the last few years and the associated very restrictive lending due to Basel III and IV, this term extension is also by far the better choice compared to any bank financing.
Furthermore, with the term extension, paragon has offered the prospect of an attractive/variable model of early partial repayment, which has already been assessed very positively by key investors.
The management is consistently pushing ahead with paragon's debt reduction. This includes the already fixed gradual repayment of the CHF bond. In doing so, the management keeps the overall structure of the liabilities side of the balance sheet in view.
Against this background, it would not make sense, indeed it would be counterproductive, to mix the interests of the various capital providers or even play them off against each other.
The management has already explained what consequences a collateralisation of the EUR bond would have, and a potential debt-to-equity swap or a conversion right is also considered as collateralisation.
We are in ongoing dialogue with the bond investors, which is in equal measure transparent, goal-oriented and perfectly compatible with a potential multi-stage voting process. The latter explicitly provides for the possibility of modified offers to the investors. The qualified expert opinion is expected to be completed in February and the result will then be made available to the investors without delay.
paragon has an adequate, positive free cash flow, which has continuously improved over time. This positive development will continue in 2022 and subsequent years. As a result, the company will gain additional leeway with regard to debt repayment over time.
Profile: paragon GmbH & Co. KgaA
paragon GmbH & Co. KGaA (ISIN DE0005558696), which is listed in the regulated market (Prime Standard) of the Frankfurt Stock Exchange, develops, produces and distributes forward-looking solutions in the field of automotive electronics, body kinematics and e-mobility. As a market-leading direct supplier to the automotive industry, the company's portfolio includes the Electronics operating segment's innovative air-quality management, state-of-the-art display systems and connectivity solutions, and high-end acoustic systems. In the Mechanics operating segment, paragon develops and produces active mobile aerodynamic systems. In the rapidly growing automotive market for battery systems, paragon now acts independently with the Business Unit Power after the sale of the Voltabox share.
In addition to the company headquarters in Delbrück (North Rhine-Westphalia, Germany), paragon GmbH & Co. KGaA and its subsidiaries operate sites in Suhl (Thuringia, Germany), Landsberg am Lech, Nuremberg (Bavaria, Germany), St. Georgen (Baden-Württemberg, Germany), Limbach (Saarland, Germany) as well as in Kunshan (China), Bangalore (India) and Oroslavje (Croatia).
Additional information about paragon can be found at www.paragon.ag.
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