Masterplast is asking holders of its 2031 bonds to waive a covenant so the Hungarian building materials group can take on a new credit line, a move that highlights how tight funding conditions are pressuring even companies with existing capital market access.
Masterplast Seeks Bondholder Waiver for New Credit Line
That matters because the request is not about expansion for its own sake. It is about liquidity. Masterplast said current macro and market conditions mean it needs additional financing to keep operations funded, and it has started talks on a new multi-purpose credit facility of up to €3 million, or the equivalent in another currency, for as long as three years and without new collateral.
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The problem is debt leverage. The company’s bond documentation limits borrowing when net debt-to-EBITDA rises above 3.5 times, and Masterplast says that ratio is already above that level and would remain above it after any drawdowns. That is why it needs unanimous approval from all holders of its Masterplast 2031/I bonds before it can sign the facility or use the money without breaching the terms of the notes.
For investors, the story is less about a single loan and more about the balance between survival and dilution risk. A clean waiver would give Masterplast more breathing room through what it calls a difficult operating backdrop. A refusal would leave the company with fewer financing options just as its cash position has already thinned.
The latest quarterly update showed cash fell to €6 million at the end of September, less than half the level a year earlier. Masterplast has tried to reassure the market by saying it expects inventory reduction and seasonal receivables collection to improve cash and provide the financial background for bond repayment. It also pointed out that last year bondholders approved a similar request tied to a €2.5 million loan.
The longer-term question is whether the company can grow out of this leverage problem. If demand in its markets stabilizes and working capital eases, a modest credit line may simply bridge a rough patch. If not, repeated covenant waivers can become a warning sign that financing needs are outpacing operating cash generation.
For now, investors should watch the vote closely. It will show whether bondholders still believe Masterplast can manage its debt load without harsher restructuring, and whether the company can buy enough time to restore flexibility. That makes the waiver request worth following, especially for long-term holders of the stock and the bonds.
| Entity | Gains | Losses |
|---|---|---|
| Masterplast | ▲More liquidity runway | ▼Less financial flexibility |
| Bondholders | ▲Potentially preserve recovery value | ▼Take on more covenant risk |
| Existing shareholders | ▲Avoid immediate distress | ▼Face leverage overhang |
| Lenders/capital providers | ▲New business opportunity | ▼Exposure to a stressed borrower |
