Wow… just to refocus everyone’s attention!
G3Kurz put it best with this last statement: “Most importantly they need new ownership with a new focus on the company, customers and its employees and a new vision to pull it out of the current Stuka Death Dive it's in. 25K or 35K VP9's is not going to save it. Too little profit too late. Drop in the bucket versus what is needed.” Current ownership leveraged the company to the hilt and is still doing so. This most recent financial event is most concerning because the replaced a €4.7m credit line with a €30m one plus they drawn on €15m right way. Contrary, this new credit needed to be done to replace the old one that was going to expire 2017 as jkoul pointed out in post 203. Also, this credit line is super senior to the 2018 bond of €295, which means if HK closed its doors, creditors would be paid back in a certain order ie the credit line get paid first then bonds holders. Another plus, even with this additional €15 debt, it wouldn't have been issued if there wasn't enough collateral for the creditor to be assured that they would be paid back in full with interest. Last plus, HK still has enough equity to left on their balance sheet in the form of hard assets, but they are still liquid cash strapped, which is bad and why they need this quick cash infusion.
One last note: 2013 debt to equity ratio was at 81% and I'm guessing this new RCF brings them up to 83%.
Last edited by Oicani; 12-07-2014 at 04:38 PM.
From Bloomberg news agency:
German Defense Ministry spokesman Flosdorff comments in Berlin:
G36 assault rifle has deficits. Ministry is weighing consequences of those.
*** “Heckler & Koch Bonds Tumble as German Military Reviews G36 Rifle” ***
By Katie Linsell and Luca Casiraghi
(Bloomberg) -- Heckler & Koch’s EU295m of 9.5% bonds due May 2018 tumbled to 67.3 cents on the euro, according to data compiled by Bloomberg.
• Lowest since May 2012
• Dropped from 74.6 cents March 20
• Yields surge to record 25.4% vs ~8% in July
• German military leadership met to discuss preliminary results of investigation into co’s G36 rifle: Defense Ministry statement Monday
• Results show “precision problem, particularly at high temperatures”: German Defense Minister Ursula von der Leyen said in statement
• Military stopped delivery “as a precaution”: statement
• May consider alternative weapons based on final report: statement
• Co. said it’s “shocked” by comments: statement on website Tuesday
• “We take particular exception to the fact that the ministry made public statements which have extensive repercussions for our reputation without first seeking to discuss the matter with Heckler & Koch”: statement
Until Andreas Heeschen and Keith Halsey are hit by the proverbial beer truck, HK's financial situation will only grow worse.
Apparently it is a polymer barrel berring. Basically, when the barrel heats, which all barrels do under fire, the plastic melts and the barrel then literally "floats" around. As for where the round will actually go? Who knows.
The issue has been known since at least 2010, but rather than addressing it, HK has been denying it.
If HK loses the German Government as a customer, they are probably done.
Add in the recent lawsuit over the MP5, which may have merit, and they are again, probably done.
I am deeply disappointed that HK was so poorly managed.
Such a pity
How is this conversation still going?
If it's an HK I probably want one.
I BACK THE BLUE
HK's bond trades lower given the negative news about the G36, see post on 4/2... Personally, I will keep this thread running until HK digs itself out of the hole their in or they close their doors and new owners step in.
Sounds to me like German military is trying to be sneaky. If it's true that they've never directly contacted HK about the problems and an independent report already claimed the problem was ammp related.
H&K Sponsored Shooter (novice so don't get excited I'm awesome)
P30 .40 v4.1 (GGI)
Hk45c V7- medium (GGI)
**NEWSFLASH** ....... " Heckler & Koch GmbH " has just announced that ALL future weapons contracts will be based on the current value of the BITCOIN .....!!!! At this point the markets aren't quite sure how to react . It appears that this my be a good time to acquire shares ( we really mean guns ) . Rumor has it that some potential insider trading might be going on across the big pond . They seem to have access to financial information that us Europeans do not . Based on todays value of 1 BITCOIN = $258.28 US DOLLARS ..... Heckler & Koch GmbH Financial Statements could be worth Billions of $$ , or nothing , we really aren't quite sure yet .
There are some rumours, that "problems with G36" are nothing more than paving way for G38. Bundeswerhr must somehow convince legislators that they really need new rifle. How to convince them if old one is actually new and shiny and works good?
Take in mind that Spain (warmer country, plus they fielded G36 in Iraq) or Lithuania or several SOF units fielding G36 did not report similar problems. Or at least they do not think it is valid (or use better trigger finger discipline).