Mutares Launches €25M Bond Tender as €50M Terranor Exit Fuels Debt-Reduction Drive

Mutares offers €25M bond buyback at 101% par, funded by Terranor exit proceeds, aiming to slash total liabilities from €385M to €250M.

Mutares has put its Nordic bondholders on notice. The Munich-based investor is offering to buy back up to €25 million of the notes at 101% of par plus accrued interest, with the tender window closing on 2 June. The move is the first concrete step in a broader plan to slash total liabilities from €385 million to €250 million, after a key financial covenant on its bond was breached last year.

The cash to fund the buyback is coming from exits. On Tuesday, Mutares completed its full divestment from the Terranor Group, netting a gross proceeds of roughly €50 million — €25 million of which landed in 2026 alone. The exit unfolded in three stages: the initial IPO in June 2025, followed by two secondary sales in December 2025 and March 2026, and finally a private placement to Swedish and international institutional investors. DNB Carnegie and SB1 Markets acted as joint bookrunners. The company had held 46.3% of Terranor at the start of the final leg.

Terranor proved a solid performer. Over the full holding period, the return on invested capital comfortably exceeded Mutares’ internal target range. The business — a Nordic road maintenance specialist — benefited from structural tailwinds: Sweden hiked its road budget for 2026-2037 by 48%, and Terranor captured 31% of the awarded contract volume in the 2026 tendering season. Its order book sits at a record high.

The urgency behind the bond buyback stems from a covenant breach in 2025, when Mutares' net-debt-to-equity ratio strayed outside permitted limits. Creditors granted a temporary waiver valid until the end of June 2026, giving management a tight window to repair the balance sheet. Regular quarterly tranches of further buybacks are planned from the second quarter onwards.

Operationally, the first quarter of 2026 provided a solid foundation for the clean-up. Revenue edged up to nearly €1.7 billion, while adjusted EBITDA swung firmly into positive territory. The full-year outlook remains unchanged: Mutares targets group revenue between €7.9 billion and €9.1 billion, up from €6.5 billion in 2025, and a holding-level net profit of up to €200 million. The company also confirmed its largest-ever acquisition — the engineering thermoplastics business of SABIC, representing around €2.0 billion in revenue — is on track to close by the end of the second quarter.

To fund further exits and the debt reduction, Mutares is banking on a record pipeline of divestitures. Management has singled out its defense and energy holdings — including Magirus and the NEM Energy Group — as likely candidates, with proceeds expected to comfortably exceed the €230 million fetched in 2025. Five smaller exits have already been completed this year; Terranor is the first large one.

At the same time, Mutares is pushing ahead with its US expansion. A second American office is in the works, backed by a fresh capital increase, and the North American acquisition pipeline represents roughly €4.8 billion in revenue. The board is targeting at least 25% annual group growth through to 2030.

Shareholders have a date with the annual general meeting on 3 July. The supervisory board and executive board are proposing a base dividend of €2.00 per share, with an additional performance dividend to be paid if successful exits generate extra liquidity.

Investors appear to welcome the dual focus on balance sheet discipline and growth. The stock has rallied to around €27.35, a near-16% gain from its April low, though it remains roughly 25% below the 52-week high of €36.75. Month-to-date, the shares have added almost 8% — a sign that the market is betting the covenant deadline can be met.