e-Dreams

All,

Please refer to our analysis of e-Dreams here. 

The announcement for September confirms our CF modelling. However, as a levered bet on finding near-term a vaccine against Covid19, eDreams is becoming increasingly less likely to pay off. Bar the opening of European international Tourism this summer, e-Dreams could file on the day they “arrive" in Spain.

As per our previous mails, we have been changing our minds on e-dreams in recent weeks as the likelihood of a re-opening of European tourism this year is dwindling. By comparison the US domestic market seems better placed to open earlier.

In this context, e-Dreams' announcement to move its registered seat from Luxembourg to Spain can be interpreted in more than one way:

1) As per management: It saves costs.

2) We favour the theory that it is motivated by either allowing the company access to certain government funds in Spain relating to Covid19 stabilisation and / or to chose a protracted Spanish regime, which could allow the company to regain revenues in 2021, once a vaccine has been found, before reaching a final creditor composition.

Given Spain’s dominant tourism sector, the survival of a company like e-Dreams (which provides price transparency for tourists and thus keeps travel costs under control) should be of national importance. Thus adding well connected financiers from Madrid to your board is possibly also the right strategy. 

Wolfgang