Leoni: "STARK Corporation refuses to close the sale"
Leoni says that all the closing conditions for the sale of its Business Group Automotive Cable Solutions (BG AM) has been fulfilled. However, the buyer STARK has – according to Leoni – unexpectedly demanded very significant amendments to the purchase agreement.
Leoni states in a press release that despite its willingness to compromise, STARK refuses to agree and will not perform the closing of the agreement entered on 23 May 2022.
As no grounds for non-performance of the closing exist, STARK is in Leoni's view acting in breach of the contract. Leoni says that it will take all measures to enforce its rights against STARK.
This transaction is linked to Leoni's refinancing plan, which is the basis for the financing of the Leoni Group until the end of 2025. For this purpose, Leoni has already executed a comprehensive contractual documentation of the refinancing plan with its syndicate banks and the borrower's note-holders. But a partial repayment of financial obligations with the profits from the sale of BG AM is a crucial condition for its realisation. The refinancing plan cannot be carried out at this time due to the developments surrounding the transaction with STARK.
Leoni's syndicate banks have already stated that they will temporarily extend the credit facilities, maturing on 31 December 2022. Leoni says that it will consult with the syndicate banks on appropriate modifications to the refinancing plan.