The analysis is carried out based on the methodology for corporate bond ratings and consists of the evaluation of quantitative and qualitative criteria.
The subject of the analysis is an 8.5% interest bearer bond (ALNO bond) in a total volume of up to EUR 45 m. maturing on May 14 2018 which is issued by ALNO AG located in Pullendorf (issuer). The bond is unsecured and not subordinated.
ALNO AG is the parent company of the ALNO Group. The Group's business segment encompasses the development, production and sales of kitchen furniture and the sale of electrical appliances and accessories.
In addition to a high level of awareness of the brand ALNO, from a qualitative point of view, the innovative strength and the quality of products are the company’s factors of success. From the viewpoint of Scope, risks arise from the intense competition in the kitchen market as well as from the capital-intensive business model of the company, since the ALNO Group generated significant losses in the years 2010 to 2012 - and in this regard especially in 2011 – as seen in the balance sheet. After a related management change in April 2011 and the averted bankruptcy, the company now intends to increasingly expand abroad. In this context, apart from the possibility to organic growth ALNO sees the potential to increase its capacity in the short term by international acquisitions.
However, the cash available regarding the company’s current situation would be sufficient, from a formal perspective, only until May 2013 without further financing measures. The existing financing gap for 2013 and for subsequent years is now to be closed by the issue of the bond and by conforming bank financing as well as by additional factoring. Currently, the company is still in negotiations with various banks for completion of appropriate debt financing agreements. Final agreements are so far still due. If the financing measures are not adopted in time, this could cause an insolvency of ALNO AG in the short term and thus may lead to a complete loss of the invested capital for investors. Within the past two years the main shareholder and supplier Whirlpool as well as Comco Holding AG were supporting the issuer by the extension of payment periods and by granting loans. The management of ALNO is planning further negotiations with Whirlpool and Comco Holding AG to secure its ongoing liquidity situation, as long as additional debt financing measures are not successfully implemented in due time.
The company`s sustainable stabilization also requires a consistent and timely implementation of the measures planned within an existing restructuring strategy. Due to the current business development the rating outlook is stable.