Maxeda - comment

Kingfisher’s reported Q3 French LfL sales down 4.3%, led down by Castorama. Consequently, Maxeda’s bonds dropped into the low 70s, but in our opinion, that is not quite enough. The company needs a miracle now to refinance. Even though we see fundamental value around 70c/€, we would imagine the bonds drop through that level before recovering there. The DIY retailer has well over 100 days of payables outstanding - resulting in zero NWC - and virtually no fixed assets. So shareholders carry nuisance value. We sold our position approx. a month ago.