Covestro's Final Preparations Before Delisting

Covestro refinances with a new €1.5B credit facility amid privatization by Abu Dhabi's XRG, leadership changes, and a strategic cost-cutting drive.

As its departure from the public markets draws near, Covestro is making significant adjustments to its financial structure. The chemical group recently secured a new €1.5 billion syndicated credit facility, a move that represents a strategic recalibration of its funding. This three-year agreement, which includes two extension options, was finalized with 15 core banks at the end of March. It replaces a previous, larger facility that totaled €2.5 billion.

Leadership and Ownership in Transition

These financial maneuvers occur against a backdrop of profound corporate change. The driving force is the ongoing squeeze-out by majority owner XRG P.J.S.C. from Abu Dhabi. On March 20, XRG formally submitted its request to Covestro's management board. The cash compensation has been set at €59.46 per share, a figure that aligns closely with the current trading price, which exhibits a 30-day volatility of under 3.5%. The market has largely anticipated this outcome, as XRG and its subsidiary already control 95.1% of the share capital.

The final decision rests with shareholders at the Annual General Meeting scheduled for May 19, 2026. Following registration in the commercial register, all remaining shares will automatically transfer to the majority shareholder. The company's admission to the regulated market will officially terminate on May 5.

Simultaneously, the executive suite is undergoing a major overhaul. CEO Markus Steilemann will not renew his contract, which expires in May 2028. CFO Christian Baier is set to depart even sooner, in September of this year. The supervisory board now faces the task of filling both key positions for a company that will soon operate entirely as a private subsidiary of an Abu Dhabi-based energy conglomerate.

Operational Challenges and Strategic Responses

The refinancing effort comes during a period of significant operational pressure. Covestro's financial performance for the past fiscal year underscores the challenges: EBITDA plummeted by approximately 31% to €740 million, culminating in a net loss of €644 million. The company has been contending with falling selling prices, adverse currency effects, and substantial overcapacity within the broader chemical industry.

In response, the STRONG cost-saving initiative is progressing. Covestro has already realized savings of around €275 million ahead of its end-2025 target. The program aims to achieve annual savings of €400 million by 2028.

Concurrently, the firm is pursuing an acquisition to bolster its operations. It aims to take over two production sites for HDI derivatives from Vencorex, located in Thailand and Texas. While initially expected to close by the end of 2025, the completion of this transaction is now projected for the first half of 2026. These final strategic and financial adjustments are defining Covestro's pathway as it prepares to exit the public equity stage.