admin Following its initial public offering on the New York Stock Exchange, Birkenstock Holding plc is utilising the net proceeds from the IPO, together with cash on hand, to repay existing debt.
The company has revealed an early repayment of 450 million dollars on its USD Term Loan B and 100 million euros on its EUR Vendor Loan – both loans were issued to finance the acquisition of Birkenstock by L Catterton in April 2021.
As a result of the prepayment, the company said that it has reduced its total debt from approximately 1,840 million euros to around 1,314 million euros.
Commenting on the development, Oliver Reichert, director of Birkenstock Holding plc and CEO of the Birkenstock Group said in a statement: “It’s as simple as this: We don’t like to be in debt, and we don’t need to because we run a profitable and cash-rich business. Taking this important step of early repayments emphasises our commitment to debt reduction as outlined in our IPO prospectus.”
The company added that early loan repayments strengthen Birkenstock’s balance sheet while achieving additional financial flexibility. Since entering into the new capital structure in April 2021, Birkenstock has reduced its net debt-to-adjusted EBITDA ratio from above 6x to below 2.5x through repaying debt and growing EBITDA.
The company aims to achieve a leverage ratio of below 2x within the next 18 months. Long-term, the company expects to achieve a leverage ratio of below 1x.
