Clearly, H121 has been phenomenal and we are sitting on unlevered 23% net return for the first six months. So naturally, we should throw out a few names where the opportunity now lies behind us and that we no longer consider worth covering - unless you do, that is.
New Names:
Please refer to our unchanged analysis here.
After initially positioning ourselves for a VW take-out ahead of the restructuring, it is finally here - only that
Please find our unchanged analysis of Europcar here.
The upside of VW re-integrating the Rental company has been making a lot of sense to us and we were surprised the OEM did not come forward to buy the business on the cheap in 2020. Over a year after we
Please refer to our Europcar analysis here.
The call was uneventful and unsurprisingly the company is trading well below our expectations at the beginning of the year, given
Please find our unchanged analysis here.
Following Europcar's restructuring becoming effective on Thursday, Friday’s share price rocketed as the stock is becoming available to a wider investor audience. Nevertheless,
England’s new national holiday will be placed on the 17th of May - the day pubs re-opened. Incidentally, that is also the earliest date from which foreign holidays may be allowed. Meanwhile, the EU are unlikely to be much faster.
Oh, we always knew that:
Please refer to our unchanged analysis here.
As widely anticipated, the Paris Commercial Court has approved the Europcar SFA, which in any event was mostly consensual. Subject to today’s recognition hearing in the US this plan will go ahead. The prospectae for the new instruments
Calling the Europcar EGM with only 2 weeks notice should help with voting as shareholders must agree with “only” 2/3 of votes represented. Given the
Please refer to our updated analysis of Europcar here.
Fleet model, CFs, recap and legal remain unchanged, but we have added a more concrete NPV and IRR on the current bonds / future equity.
By the company’s estimation, the
A court ruling is expected by mid-January (with at most one-month extension), which is sooner / better than we had expected. Note that we suffer from unevenly distributed information regarding certain documents that were available on
Further to our previous note, we would like to make a clarification.
The member in question has been considering the legal basis of the non-disclosure of information in
Please refer to our unchanged analysis here.
One Sarria member is frustrated by Europcar’s information policy around the term sheets underlying the new facilities and have informed us they will be notifying the FCA and
Please refer to our updated analysis here.
It’s a small update on paper. Our initial estimates have not been far off, and we’ve sent the updated recapitalisation table in our last email. The analysis now reflects the currently discussed deal.
Positioning:
Please refer to our unchanged analysis here.
Despite some of the detail, the refinancing is close to our estimates. Cash injection is admittedly E75m lower than we had estimated and the Fleet cash is being provided directly via an equity RCF as opposed to being injected down from via the corporate level, but otherwise, the metrics compare closely.
Please refer to this week’s analysis of Europcar here.
We are dipping our toe with a
Please refer to our updated analysis, integrated CF model and recap scenario here.
We like the company. Never mind that we struggle to credibly model the
M. Bourboulougx has been appointed and while advisors are signing NDAs in expectation of the IBR from 8Advisory this morning, some further thoughts on game theory and positioning below:
Holdco Notes - large but vulnerable:
We had expected consents to be more readily forthcoming. L&W Paris are locked in conference calls all day and despite best efforts, we - and even Lazard - have yet to hear back ...
The bonds are not in strong enough
While we are waiting for 8 Advisory, this is how we are thinking about the bonds:
On the size of the restructuring:
- With the bonds’ BV approx. 10x market cap, any
Please refer to our unchanged analysis here.
Current lay of the land:
- The RCF has substantially traded into HF hands at substantial valuations of 91c/E.
- According to FY2019 accounts the corporate
Please refer to our unchanged analysis here.
Europcar bonds are dropping today following news that more than E200m of the corporate RCF have been trading into more aggressive hands than those of French banks. As per our note, the ECMG bonds are
Please refer to our unchanged analysis here.
Europcar’s announcement yesterday draws the final conclusion under the idea that VW might buy in after all or that another deal could be engineered.
Following further discussions with legal advisors, please find our updated analysis of Europcar here.
Further to our update last week, we have done additional work on the unfolding game theory in this name.
Bondholders are clearly
Please refer to our updated analysis of Europcar here.
We have in particular focussed on the legal analysis and the game theory before the background of a possible Consiliation / Sauvegarde filing as well as built differentiated cashflow forecasts for the fleet and the corporate.
Further to our earlier note on Europcar, VW’s exposure may be for only 50% of the fleet. However, we disagree with certain analyst estimates that Europcar is
Please refer to our unchanged analysis/model here.
We remain long the 24s for 4% of NAV at 53c/E.
S&P decided to downgrade Europcar to CCC+ with a negative outlook. The agency contends that sales could drop by -50% this year and that recovery in 2021 might only reach 75% from
Please refer to our updated analysis here.
From our perspective the call was largely uneventful except for two nuggets of information:
Please refer to our analysis on Europcar here.
Eurazeo have published a statement (attached) implying that