Terranor Exit Nets Mutares €50M as Bond Buyback Seeks to Plug Covenant Gap

Mutares exits Terranor for €50M, launches €25M bond buyback after covenant breach, aiming to cut bond debt to €250-300M while revenue grows 10%.

Mutares is pushing on both sides of its portfolio strategy this spring: cashing out of a Norwegian infrastructure bet while simultaneously shoring up a balance sheet that tripped a debt covenant last year. The Munich-based holding company placed its remaining 46.3% stake in the Terranor Group with institutional investors, generating around €50 million in gross proceeds over the entire holding period. At the same time, it launched a €25 million buyback of its Nordic Bond 2023/2027 to address a 2025 covenant breach.

The dual moves underscore the balancing act Mutares faces as it tries to convert a record pipeline of planned exits into the cash needed to bring debt back inside its bond’s financial limits.

Terranor: From Carve-Out to Full Exit

Mutares originally acquired Terranor as a carve-out from Swedish construction group NCC in 2020, adding the Danish business the following year. The company went public in June 2025, after which Mutares gradually reduced its holding through placements in December and March before exiting completely this month. DNB Carnegie and SB1 Markets handled the latest tranche; a per-share price was not disclosed.

The investment case got a lift from Terranor’s operating performance. The group secured roughly 31% of the contract volume awarded in Sweden’s 2026 tendering season, pushing its order backlog to a record. Sweden has boosted its road budget by 48% for the 2026–2037 period, providing a long tailwind. Mutares said its return on invested capital from the Terranor deal landed “clearly above the target range.”

Bond Buyback Targets Debt Reduction

The bond repurchase covers up to €25 million of the €250 million Nordic Bond, or about 10% of the outstanding volume. Mutares is offering 101% of face value plus accrued interest, with an acceptance window running from 11 May to 2 June 2026.

The move follows a covenant miss in 2025, when the ratio of net debt to equity strayed outside agreed limits. Total bond liabilities currently stand at €385 million. Mutares aims to shrink that to between €250 million and €300 million, with quarterly buybacks of at least €25 million planned from the second quarter onward. Funding will come from further portfolio sales, including the six divestitures already completed in the first quarter — among them Kalzip and the inTime Group — and a potential initial public offering or trade sale of firefighting unit Magirus.

Operating Momentum Picks Up

The operating picture has improved even as the balance sheet remains the main concern. First-quarter revenue rose 10% year-on-year to €1.68 billion, while adjusted EBITDA swung from minus €30 million to plus €11 million. Mutares reaffirmed its full-year 2026 guidance: consolidated revenue between €7.9 billion and €9.1 billion, and a holding-level net profit of €165 million to €200 million. Exit proceeds from planned sales are expected to “clearly exceed” last year’s figure of roughly €230 million.

The stock closed the week at €26.95, down 0.19% on the day and roughly 10% since the start of the year. That puts it just above the 52-week low of €23.60 and 27% below the summer 2025 high. The market is looking for hard evidence that the promised exit wave will translate into real cash inflows.

Investors will get a fuller picture at the annual general meeting in Munich in July, where management will present the 2025 results. In the meantime, the Terranor exit offers a concrete data point — but whether it will be enough to convince the market that Mutares can simultaneously clear its bond covenants and hit its profit targets remains the open question.