Translation: Original published in Finnish on 05/11/2026 at 08:07 am EEST

Norrhydro announced on Friday that it will amend the maturity date and terms of the 1.5 MEUR convertible bond issued in December 2023. We consider the amendment a sensible step for the company's financing, as it diversifies the repayment burden, previously weighted towards late 2026, over several years. In our view, the arrangement provides the company with more flexibility to strengthen its balance sheet, even though interest costs for the loan will remain high for longer. We will consider the revision of the loan terms in our forecasts in connection with our next update.

The repayment is spread over three years

According to the original terms, the entire 1.5 MEUR loan principal was due to mature in a single installment at the end of 2026. The loan repayment has been divided into three installments under the new terms, which have also been approved by the bondholders. The first installment of EUR 0.6 MEUR will continue to mature as originally scheduled on 31 December 2026, but the remainder of the loan will be split to maturity at the end of 2027 (EUR 12 0.5 MEUR) and 2028 (EUR 0.4 MEUR). The right to convert the bonds into shares will also be postponed accordingly until the day before the new maturity date of each installment.

The revision supports balance sheet management and liquidity

We consider the extension and staggering of the maturity to be an expected and positive move. We had previously estimated that the company might negotiate an extension for the loan, even though in our forecasts the loan was replaced by other debt at the end of 2026. Norrhydro's balance sheet has been leveraged due to significant factory investments and NorrDigi development efforts, even though the company's earnings performance turned clearly upward during 2025, and this positive development continued in Q1'26. At the end of Q1'26, the company's net debt to rolling EBITDA was at a tolerable level of 2.6x, but a one-time payment of 1.5 MEUR would have been a significant burden on the company's cash at the end of the year.

We find the 10% interest rate on the convertible bond to be high, which we believe will keep the company's financing costs elevated in the coming years. In our view, however, securing liquidity and phasing repayments are more important for the company at this stage than getting rid of a rather expensive loan as quickly as possible. We believe the arrangement will give Norrhydro the peace of mind to focus on scaling its conventional cylinder business and commercializing NorrDigi technology, the success of which we consider critical for a more permanent strengthening of the balance sheet.