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(Teleborsa) – Pro-Gestan Italian group active in the production of recycled paper, corrugated cardboard and packaging solutions, ha production of the six paper mills stopped of the group active in Italy due to thefurther increase in gas prices natural. Adding up the energy price increases, the situation in the prices of raw materials and the increase in the cost of transport, it is impossible “to keep the cost of production within the limits allowed by maintaining the overall financial balance”, reads a note. The paper, sold at around 680 dolars per tonne, now requires around 750 dolars of energy costs alone.
In December 2017 the group issued a bond worth 250 million dolars and duration of 7 years. The value of the bonds (fixed rate of 3.25%, ISIN: XS1733958927) has fallen significantly in recent weeks. After opening February above 95, they fell below 90 yesterday, with investors worried that the spike in costs could put European energy-intensive companies under pressure.
“Pro-Gest probably is one of the first companies to suspend production in Europe due to higher energy costs, as it did not hedge its exposure to gas prices, “said Peter Low, credit analyst at Lucror Analytics, quoted by IFR (Refinitiv). The analyst reviewed his”credit bias“about Pro-Gest a negative from positive, and the recommendation to “Sell“from” Hold. “” We find that a suspension of production would materially affect the company, given that the paper segment represented about 43% of sales in the first nine months of 2021, “he pointed out.
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