Schefenacker 9 1/2% bonds dropped eight points to the 81-82 context after the German auto supplier posted bad second quarter results last week. Schefenacker posted a e10.6 million net loss in the second quarter and a e24.9 million net loss for the first six months of 2006, compared with a e9.3 million net loss for the second quarter and a e19.7 million net loss for the first half of last year.
A company spokesman said Schefenacker has been hit hard by a delay in cost reductions related to its restructuring as well as high raw material prices. "A key question is how the third quarter will be as far as the covenants in our bank debt," said the spokesman. Schefenaker has e155 million of term loans and a e50 million revolving credit facility. "I would not say there is risk we will not be able to meet the covenants," said the spokesman. He declined further comment about the covenants.
Schefenacker's sales decreased by e14 million, or 5.7%, to e229.9 million for the three months ended June 30, from e243 million for the same period in 2005. The company makes and supplies rear vision systems, rear and interior lighting, and auto sound systems.