KME - Comments

Intek announced the completion of the 55% sale of KME’s specials business to Paragon. The release commented that the proceeds would reduce KME’s “net financial position” but did not address the use of proceeds. We believe that most of the cash is needed to reinvest in the business rather than pay down bond debt. The sale will net the expected total of around €200m in cash with KME also having a €32m shareholder loan (vendor note). We have no details of the terms on this. The sale is subject to final approval by competition authorities in Germany and Austria. Paragon received finance from Hayfin Capital Management.