Hochdorf CEO wants to grow further with operating business
Published: Thursday, Sep 5th 2024, 09:00
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The CEO of the Hochdorf Group, which is in provisional debt restructuring moratorium, Ralph Siegl, is confident about the future of the sold operating business. "The steamship is afloat, now it needs coal," said the CEO in an interview with CH-Media newspapers published on Thursday.
The "cash" comes from the designated buyer, the Swiss-British private equity firm AS Equity Partners. They don't need to know anything about the dairy business, says the CEO. "AS Equity Partners knows the financial markets and brings capital with it. These are their strengths."
Meanwhile, operational responsibility for Hochdorf Swiss Nutrition (HSN) will remain with Siegl and his management team. They intend to continue producing infant formula and products such as milk protein powder, whey powder and fat powder.
The market position is even to be expanded. "We can continue to play our important role in regulating the milk market," says Siegl. Hochdorf processes surplus milk into powder with a longer shelf life.
Administration remains in Hochdorf
The Hochdorf CEO sees potential in the Middle East and North Africa in particular. The products of Hochdorf's baby food brand Bimbosan, for example, are a good alternative to breastfeeding for working mothers in these regions. In the long term, Siegl is aiming for HSN to achieve profitability at EBITDA level in the low double-digit percentage range of turnover.
The administration is to remain at the Hochdorf site. "Our roots are in Hochdorf and we employ many people from the region there," says Siegl. "We want to keep these people and their expertise."
Of the company's 360 employees, 40 percent currently work at the main site. With the planned discontinuation of production there, 10 to 15 percent of jobs are to be cut by the end of 2026 at the latest. However, new employees will be needed again in the event of future growth, according to the Managing Director.
Banks extend credit
The CEO emphasized that the sale of HSN has also recently given the banks confidence. They had approved the takeover and extended a loan of CHF 67 million, which would have expired in September 2025, by six months for the new owner.
AS Equity Partners is paying Hochdorf 15.5 million Swiss francs for the operating business. The deal must be approved at the Extraordinary General Meeting on September 18, 2024. The agenda also includes the renaming of Hochdorf Holding and the delisting of the shares from the Swiss stock exchange.
As the purchase proceeds are not sufficient to repay the Group's debts, Hochdorf shareholders must expect a total loss. One of the largest shareholders is the Association of Central Swiss Milk Producers (ZMP) with an 18% stake.
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