Europcar - On liquidity and future debt capacity

All,

Please refer to our updated analysis here.

From our perspective the call was largely uneventful except for two nuggets of information:

1) The new facilities backed by France and Spain are to rank pari passu with the corporate bonds and

2) the defleeting in Q1 was stronger than we had expected - i.e. OEMs and dealers are being supportive of a flexible fleet management. 

Our model suggests that the company has sufficient liquidity to rightsize this year and to stabilise on a new, lower normal next year. On that basis and in particular with the potential growth from there, Europcar can carry its debt and ultimately refinance its obligations.

As an investment, Europcar is not one of the early ones to bounce, since it is highly exposed to travel. But its st. fleet financing flexibility and low exposure to at-risk vehicles makes it one of the most attractive candidates in the sector, trading very wide in the current environment.

Wolfgang