Adler - Vindication - Ad-Hoc Call this morning
All,
Please refer to our unchanged (and vindicated) analysis here.
As per previous notes, the KPMG report was likely to be a positive event for Adler - and 'related parties'. Adler’s communication overnight however has been yet more positive, although we think it is likely to focus only on the narrow-angle of refuting the short-seller report. While we expect the company to book some more material provisions in their FY21 report, those would not directly relate to any 'related party transactions', but rather reflect the reality of Covid and perhaps some aggressiveness in the past - nothing the market has not priced in several times over.
Adler are holding an ad-hoc call today at 10.30 am to present shat should be 'selected findings' of the report. In their press releases overnight, Adler claim to have published the report on their website, but as of now, we cannot find it.
Adler webcast:
https://www.webcast-eqs.com/adler20220422
Telephone dial-ins:
DE: +4969201744220
UK: +442030092470
USA: +18774230830
PIN: 80576975#
Positioning:
- We remain long the German RE cluster with positions in the Consus 22s, Adler shares and Aggregate 24s. We see the Consus 22s as par paper, Adler shares fairly valued at €17p.s. and Aggregate paper to be ultimately refinanceable.
- While the KPMG special audit is a paper commissioned by Adler itself, we do not expect the state attorney or Bafin to launch formal proceedings that would be in opposition to its findings.
- We expect the lack of financial damage identified by KPMG to have positive consequences for Aggregate’s ability to close their refinancings for VIC and Fürst.
Wolfgang
E: wfelix@sarria.co.uk
T: +44 203 744 7003