Article
Stark TLB Bids Down Around 10 Pts as Q2 Adj. EBITDA Falls 72% YoY on Adverse Weather, Weak UK Market; Group Targets Sale-and-Leasebacks to Stem Persistent Cash Burn
Bids for Denmark-headquartered building materials group Stark’s loans fell around 10 points after second-quarter fiscal 2026 adjusted EBITDA fell 72% year over year as a result of bad weather across the DACH region and intense competition in the U.K. market. The CVC-backed group’s cash burn continued to erode its cash position, however it plans to boost liquidity through sale-and-leaseback and other property financing transactions, sources said.
Stark’s €1.345 billion term loan B due May 2028 is quoted at 71.5/74.5 today, down from 80.25-mid on March 20, one source said.
Group sales fell 4% to €1.571 billion during the second quarter ended Jan. 31, from €1.636 billion the same quarter the prior year, driven by an 11.2% year-over-year drop in the U.K. and a 5.4% drop in the DACH region, which more than offset a 3.2% rise in the Nordics. Adjusted EBITDA slumped to €5 million from €18 million over the same period, however reported EBITDA improved to negative €1 million from negative €11 million as the level of adjustments reduced.
Year-to-date January sales slipped 2.2% year over year to €3.661 billion from €3.745 billion for the first half of Stark’s fiscal 2026. Adjusted EBITDA dropped 5.8% to €129 million from €137 million, while reported EBITDA improved 19% to €119 million from €100 million over the same period.
Stark burnt through roughly €193 million of cash during the first half of its fiscal 2026, leaving it with €93 million cash on balance sheet as of January, while its €371 million RCF, due November 2027, remained undrawn. The group still owns unencumbered real estate assets with a €1 billion plus book value and aims to realize over €500 million from sale-and-leaseback and other property related transactions, sources said.
Net leverage based on €384 million LTM January run-rate adjusted EBITDA climbed to 6.7x from 6.1x at the end of July 2025, while actual net leverage based on €307 million LTM January reported EBITDA came to 8.4x, sources said.
Stark said that it expects growth in the Nordics to slow but that the DACH region is starting to rebound from its multiyear downturn, while the U.K. market remains challenging although it sees signs that confidence is starting to recover. The company also noted that it is gaining market share in all regions, sources said.
Stark’s capital structure as of Jan. 31, 2026, is below:
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01/31/2026
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EBITDA Multiple
|
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|---|---|---|---|---|
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(EUR in Millions)
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Amount
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Maturity
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Rate
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Book
|
|
|
||||
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€371M Revolving Credit Facility
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–
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Nov-2027
|
|
|
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€1.345B Term Loan B
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1,345.0
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May-2028
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EURIBOR + 3.500%
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|
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€450M TLB Non fungible Add-On
|
450.0
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May-2028
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EURIBOR + 5.000%
|
|
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Total Senior Secured Debt
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1,795.0
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5.8x
|
||
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Lease Liabilities
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881.0
|
|
|
|
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Total Lease Liabilities
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881.0
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8.7x
|
||
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Total Debt
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2,676.0
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8.7x
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||
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Less: Cash and Equivalents
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(93.0)
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Net Debt
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2,583.0
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8.4x
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||
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Operating Metrics
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||||
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LTM Revenue
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7,676.0
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LTM Reported EBITDA
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307.0
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Liquidity
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||||
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RCF Commitments
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371.0
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Less: Letters of Credit
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(167.0)
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Plus: Cash and Equivalents
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93.0
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Total Liquidity
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297.0
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Credit Metrics
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Gross Leverage
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8.7x
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Net Leverage
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8.4x
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Notes:
Stark reported 6.7x net senior secured leverage based on €384M LTM January run-rate adjusted EBITDA |
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According to Octus’ CLO database, Stark’s loans are held by the following managers. Click HERE to see the full list of holders in the database.
To see the covenant analysis or to talk to one of our legal analysts, click HERE.
CVC acquired 100% of Stark from Lone Star in January 2021. The sponsor declined to comment.
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