OHL – Debt restructuring agreement approved

All,

Please refer to our unchanged analysis here.

Following approval from shareholders on Friday and ahead of approval by the High Court scheduled for Wednesday, our thesis remains that the SoA implementing the January restructuring proposals equate to an intrinsic value for the OHL 2022 unsecured bonds of 80-euro cents before any pop from the restructuring.

Our preference is for option 2 in the restructuring proposal. Here we see the bonds fully covered. We would receive 2 cents in cash and pay an implicit 2 cents for the share package, which might average around a 20% share for bondholders going forward, depending on total bondholder election, and therefore worth 3x as much per rights issue price of 36-euro cents, particularly given the shares are already trading at 65-euro cents.

Under the scheme, net debt is to be reduced by EUR105m to €487m (excluding a EUR130m bridge to asset sale facility and EUR10m of recourse debt) with the remaining bonds extended to March 2025. The Amodio family will inject EUR37m in equity with another EUR5m coming from Tyrus Capital (both at a price of EUR0.36 a share (today’s price EUR0.65).

Please reach out to discuss,

Aengus