Schefenacker International's bonds continued to trade up on investors' expectations the company will post good first quarter results for 2006. Its 9.5% '14 bonds traded up three points to the 93-94 context. "There is a lot of buying interest in the debt," said a trader. The bonds have surged over the past few months from a low of 70 after the German auto supplier restructured the business and cut costs. The first quarter results are due to be made public at the end of this month.
Schefenacker's EBITDA increased 5.3% in 2005 to E78 million. The increase was primarily due to the cost savings from the restructuring program. A Schefenacker spokesman said the company has cut costs by closing certain production sites and shifting some of its production to Eastern Europe. It has also limited wage increases for its German workforce. The company also brought in new management to implement the changes. Chief Executive Hans-Joachim Lange replaced Bodo Heise in late 2004. Reiner Beutel replaced Willy Hartung as cfo in October 2005.