Europcar - slightly better
All,
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.
As regards the bonds’ value allocation the generous warrant allocation is more than we had expected and drives their direct value to 55c/E.
The biggest improvement over our more conservative case is that the RCF is supposed to be refinanced rather than taking part in the equitisation. But predictably it has little bearing on the direct value of the existing bonds per se and more on the implied value option attached to the preferential invitation to inject fresh cash and the ultimate control fresh cash providing bondholders will have of the company.
Fundamentally we remain cautious about the management case and we do not expect the equity to trade particularly well out of the blocks. The new capitalisation values the company at 6x our 2022 EBITDA - which is significantly lower than what the company projects.
The two corporate notes as well as the EC Finance notes will have to consent to the proposal by December 7th.
The EC Finance notes remain untouched and benefit from the cash injection. We recently entered the notes for 2% of NAV and we maintain that position.
