Creditreform Rating has adjusted the SME Issuer Rating of SANHA GmbH & Co. KG from SD (Selective Default) to CCC with a stable outlook.
It was essential for the rating that the full implementation of the bond prolongation as of July 1, 2020 resulted in a new company situation to be assessed. This was the second bond restructuring that the company implemented within a few years out of a distressed situation at the expense of the bond creditors (1st bond prolongation took place in 2017). The process has a noticeable dampening effect on the rating. We therefore do not exclude medium and long-term adverse effects with regard to the capital market viability of SANHA GmbH & Co. KG. After a satisfactory course of business in 2019 and 1st quarter of 2020, the order intake and business figures of the company declined sharply in the second quarter of 2020, according to the management, as a result of the effects of the COVID 19 pandemic, whereby the first signs of recovery, due to the lifting of lockdown-Measures and catch-up effects, were already clear in June and, according to information, could lead to a roughly balanced half-year result. Together with improved financing terms and conditions and loans granted by Sparkasse Essen (KfW loan) and bank financing in Belgium, this counteracts a rating level below CCC. In return, the expansion of debt and the increased expenses due to the bond restructuring contribute to the current limitation of the rating. Overall, we believe that the business situation for the second half of the year, due to the uncertainties from the further course of the pandemic and its effects on the economy, will be characterized by considerable exogenous uncertainties, which is why we expect annual earnings below the previous year and a decline in internal financing power in 2020.