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KION Group Initiates Cost-cutting Measures

KION Group said it has initiated a host of measures for the coming months. They include the local suspension of production, personnel measures such as using up vacation, reducing accumulated hours in working-time accounts, and applying for short-time working.

KION Group will be able to flexibly adapt production levels at its plants worldwide in line with the availability of materials, regional demand patterns, and local rules imposed by the authorities.

In March, the KION Group also initiated various cost-cutting measures, the postponement of capital expenditure, and the reduction of the dividend to be paid in 2020 to 0.04 eros per share. The company also postponed its Annual General Meeting.

KION today said it expects demand for its products to pick up strongly once the pandemic is over. However, the Group anticipates a significant decline in the most important key indicators for the 2020 financial year compared with those for 2019.

The company noted that it has reached agreement with its core group of banks on the provision of a syndicated liquidity line with Kreditanstalt f?r Wiederaufbau or KfW taking a leading role.

Of the total credit facility of 1.0 billion euros, which the Company can draw down when needed, 800 million euros is being put up by KfW, Germany's development bank, and EUR200 million by the KION Group's core banks.

The company has also reached agreement with the banks providing its funding that the covenant in respect of its current credit and the additional facility is temporarily suspended.

The Group's revolving credit facilities now have a total volume of 2.15 billion euros, which includes the existing facility that expires in spring 2023. The additional facility runs until May 2021 and can be extended by the Company by up to twelve months if needed.

The syndicated liquidity line is a credit facility made available on standard commercial terms, with KfW putting up 80 percent of the funding.

The credit facility led by BNP Paribas, Commerzbank and UniCredit gives the Company flexible access to additional liquidity of up to 1.0 billion euros. It has a term of twelve months and two extension options, each of six months.

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