Dutch bike maker Accell Group announces €600M debt reduction amid financial turmoil: Know more

Heerenveen, The Netherlands-based Accell Group, which produces and sells bicycles, as well as their parts and accessories, announced that it is taking a significant step to improve its financial position.

It includes reducing its corporate debt by reaching an agreement with most of its financial stakeholders.

According to the company, the implementation of the recapitalisation is expected by early Q1 2025.

Implementation will either be by way of a contractual process or, if required, a court process to approve the transaction in the UK and/or the Netherlands, for which relevant and requisite stakeholder consents have already been obtained.

The transaction will cut Accell’s debt by about €600M, or around 40 per cent of the total debt, from about €1.4B to about €800B in the operating group.

The transaction also provides about €235M in extra cash funding to the business.

The group’s restructured debt will be due in 2030.

This transaction will give Accell a more stable financial structure, a stronger cash position, and the ability to invest in the business’s future.

Tjeerd Jegen, CEO, says, “The agreement confirms our key stakeholders’ confidence in the business which supports the optimistic long-term outlook of the biking market and the role Accell can play in capitalising on this. Over the past year, we have taken focused actions to bring down cost levels and increase efficiency. These actions have already strongly improved our competitive position. To accelerate our business strategy, and weather the continued challenging market circumstances, we also needed to adjust our financial structure.”  

“Upon successful implementation of the recapitalisation, we will have a revised, fit-for purpose capital structure and increased liquidity, allowing us to further implement and accelerate the One Accell strategy. This strategy will make us more efficient and put us in a better position, while it will also make us more agile, and provide us with the flexibility we need to stay at the forefront of developments. We can now fully focus on the future, as we continue to innovate and look forward to launching new models of our unique and iconic brands, together with our suppliers and dealers,” says Jegen.  

What happened?

The announcement comes over a couple of years after Kohlberg Kravis Roberts & Co. (KKR & Co) a New York-based global investment firm, acquired 96.9 per cent of the shares of Accell Group for €1.56B.

However, the acquisition has led to significant financial turmoil, resulting in a protest by domestic institutional investors against KKR, according to the report.

KKR has requested a substantial reduction in the capital for the sell-down part of the acquisition financing due to Accell Group’s declining financial performance, with revenue dropping from €1.43B in 2022 to €1.3B last year.

Furthermore, the company’s EBITDA plummeted by over 90 per cent, from €140M to just €12M.

A group of lenders, including Shinhan Investment Corp., Shinhan Bank, Korea Investment & Securities, and DB Insurance, are expected to convey their objection to KKR regarding the proposed capital reduction on the sell-down portion.

Accell Group’s financial struggles arise from decreased bicycle demand and excess inventory due to the COVID-19 pandemic.

Strengthen financial position

In the past 12 months, Accell has made focused efforts to improve its market position.

The company has integrated its businesses and optimised its manufacturing footprint to increase productivity. They have also started a savings program to enhance competitiveness.

At the same time, the Dutch company continues to decrease stock levels and expects the bike inventory to be back to normalised levels by the end of the year. The inventory of parts and accessories is already back at normalised level.

Accell is working towards ensuring its brands benefit from long-term positive trends. Their brands are performing well, showing solid volume growth and outperforming the market and key competition in the Dutch market.

Recently, the company launched new models — Koga EF3, the electronic version of the iconic Koga F3, a high-quality hand-built bike, and the Sinus FS, the full suspension version of the Winora city bike.

From 2025 onwards, there are plans to further expand the production of new models across all our brands.

Accel Group: Produces and sells bicycles

Accell Group produces and sells bicycles, bicycle parts, and accessories. 

Accell Group’s portfolio includes Haibike, Winora, Ghost, Batavus, Koga, Lapierre, Raleigh, Sparta, Babboe, and Carqon. Its P&A brand is XLC. is its brand for bicycle parts and accessories.

The company also manufactures e-bikes. 

Gijsbert de Zoeten, CFO says, “I am pleased that we can announce this agreement today, leading to a materially deleveraged Accell Group. We are grateful for the constructive approach that our shareholders, debtholders, and banks have shown in reaching this agreement. With their support, we will have a sustainable capital structure for Accell in the future. This shows the confidence all parties have in our business and strategy.”