Birkenstock Holding Inks New Term Loan and Revolving Credit Facilities Agreement

Birkenstock Holding plc subsidiaries have signed a new term loan and revolving credit facilities agreement with a syndicate of nine banks providing for new facilities with aggregate loans and commitments of approximately €850 million that will be used to refinance the existing term loans and to replace the undrawn ABL facility with a new revolving credit facility (RCF).

The total volume of commitments received reportedly exceeded the financing volume of approximately €850 million by more than 30 percent. In connection with this refinancing, the company said it is reducing the outstanding amount of term loans by approximately $50 million. This step is said to reflect Birkenstock’s strong liquidity position and its commitment to balance sheet deleveraging.

Oliver Reichert, CEO of Birkenstock Group and Member of the Board of Directors of the company: “While managing our fast-growing operating business and driving growth, we also always keep a close eye on costs in all parts of our company. The fact that we have been able to optimize the financing conditions and to reduce our liabilities demonstrates our commitment to deleveraging our balance sheet and underscores the financial strength of our cash-rich business. Additionally, this step contributes to reducing our FX exposure”.

The previous Euro Term Loan in the amount of €375 million will be replaced by an analogous Euro Term Loan in the amount of €375 million, the previous USD Term Loan in the amount of $330 million will be replaced by a USD Term Loan in the amount of $280 million and the previous Asset Based Lending Facility will be replaced by a revolving credit facility in the amount of €225 million. In connection with this refinancing, Birkenstock said it is reducing the outstanding amount of term loans by approximately $50 million, which reduces the USD liabilities by approximately 15 percent. This also reflects Birkenstock’s goal of further reducing debt on the balance sheet.

As a result of this refinancing, Birkenstock said it expects to achieve credit margin savings in the mid-single-digit million EUR range per year with potential for further cost savings. The new loan agreement will be provided by a banking syndicate of nine banks which reduces the number of lenders significantly compared with the former loan agreement and therefore also reduces the complexity and costs related to lender relationship management and reporting obligations in the future. Additionally, Birkenstock is, due to the elimination of the asset-based lending structure, providing a reduced collateral package in connection with the new facilities and expects compliance with reporting obligations to be more efficient under the new financing structure.

The new loan agreement was arranged independently by Birkenstock. Birkenstock is being supported in the transaction by the law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP. The advisor of the banks regarding the transaction is Milbank LLP.