NuWays AG Recommends Holding DEMIRE AG Stock Amid Bondholder Agreement

NuWays AG has updated its classification for DEMIRE AG, maintaining a "Hold" recommendation with a target price of €1.20 over the next 12 months. The analyst, Philipp Sennewald, outlines recent developments within DEMIRE AG, noting the company has reached an agreement with bondholders representing the majority of the outstanding bond principal amounting to €499 million.

Key aspects of the agreement include a partial redemption of €49.9 million at par and extending the bond's maturity to December 31, 2027, with an increased annual cash interest of 5% and an additional 1% PIK interest starting in 2027. DEMIRE plans to launch a tender offer to repurchase up to €209.3 million of the remaining principal at a maximum price of 76.25%, backed by commitments from bondholders within the ad-hoc group.

Apollo, DEMIRE’s majority shareholder, will provide a shareholder loan of up to €100 million to finance these operations. Additional liquidity will be sourced from current cash funds and measures adopted by Apollo to free up funds allocated to property developments, potentially amounting to €120 million.

Additionally, DEMIRE has introduced an asset disposal program involving 17 assets expected to generate net proceeds of €220 million by 2026. Despite these positive steps toward resolving refinancing issues, the agreement will impose significant operational challenges for DEMIRE in the coming years. NuWays AG maintains its "Hold" rating and a price target of €1.20.