Draslovka a.s., a global leader in specialty chemicals, has successfully placed a $325 million senior secured Nordic bond, marking its debut in the capital markets and a first for a Czech company accessing the Nordic debt market. The bond, due in 2030, carries an 11% interest rate and was issued by Luxembourg-registered NewCo Holding EUR 29 S.à r.l., soon to be renamed Draslovka Delta S.à r.l., with a full and unconditional guarantee from the parent company, Draslovka a.s.
The transaction, completed on , aims to optimize Draslovka’s balance sheet and significantly reduce its financing costs. According to the company, the bond issuance is a key part of a broader strategy to strengthen its capital structure, leading to more predictable cash flow and long-term value creation. A portion of the proceeds will be used for the partial prepayment of existing facilities, including financing from JP Morgan.
“We are extremely pleased with our inaugural bond issuance,” said Pavel Bruzek, CEO of Draslovka. “It was oversubscribed and the quality of the institutional investors is a clear endorsement of our resilient business model, strategic direction and cash flow profile. With the bond in place, we are optimally positioned to continue creating long-term value.”
The bond placement was executed exclusively with Pareto Securities, a Nordic investment bank specializing in high-yield placements. This suggests a targeted approach to accessing a specific investor base familiar with the risk-reward profile of such instruments.
Draslovka’s core business revolves around the production of specialty chemicals, notably including being one of the world’s largest manufacturers of sodium cyanide, a critical component in gold mining. The company also holds a patent for a glycinic leaching technology used in gold extraction, which aims to reduce both costs and environmental impact. Beyond mining chemicals, Draslovka is expanding into the development and production of active materials for sodium-ion batteries, demonstrating a diversification strategy.
The move to issue a Nordic bond comes after a period of capital investment by Draslovka’s shareholders. Seznam Zprávy reported in December that shareholders injected $60 million (approximately 1.2 billion Czech crowns) into the company to help cover debt obligations. Prior to that, from 2022, owners had already invested $160 million (roughly 3.3 billion Czech crowns) into the firm.
This capital infusion, coupled with the bond issuance, appears to be a concerted effort to address the company’s debt load. Standard &. Poor’s (S&P) had previously downgraded Draslovka’s rating due to concerns about its debt levels. S&P’s estimates for the company’s 2023 EBITDA were revised down to $78 million (1.6 billion crowns), from an earlier projection of $90-100 million (1.9-2.1 billion crowns).
The company’s financial maneuvering also includes a term loan of $304 million (6.3 billion crowns) due in December of this year. The bond issuance and debt prepayment are intended to streamline the capital structure and reduce cash financing costs, providing greater financial flexibility.
Beyond its core chemical business, Draslovka is actively pursuing new growth areas. In January, the company announced a partnership with Swedish sodium battery manufacturer Altris. This collaboration will see Draslovka begin production of cathode material for sodium-ion batteries at its Kolín facility. The company has already begun modifying the production line, with an anticipated annual capacity of up to 350 tons of sodium-ion cathode material.
The move into sodium-ion battery materials represents a strategic diversification for Draslovka, tapping into the growing demand for alternative battery technologies. Sodium-ion batteries are gaining traction as a potentially lower-cost and more sustainable alternative to lithium-ion batteries, particularly for stationary energy storage applications. This expansion positions Draslovka to capitalize on the evolving energy storage landscape.
Draslovka is owned by a consortium of investors including Petr Pudil, Vasil Bobela, Jan Dobrovský and the Brůžek family. The successful placement of the Nordic bond demonstrates confidence in the company’s long-term prospects and its ability to navigate a challenging financial environment. The company’s ability to become the first Czech firm to access the Nordic bond market is a significant milestone, potentially opening doors for other Czech companies seeking capital in the region.
