OHL – The final slice
All,
Please find our unchanged analysis here.
The fact that since Friday the equity has fallen by less than the value of the subscription rights (EUR0.22 value vs -EUR0.14 drop), shows that the equity market is reacting positively to the news. It supports our view that there will be demand beyond the EUR5m we know Tyrus Capital agreed to subscribe for. The bonds have risen slightly in the last few days and a successful placement should push them higher.
Rights Issue:
- The equity is currently trading at EUR0.52 vs EUR0.66 just before the announcement.
- At the time of the restructuring OHL promised up to EUR71m in new equity:
- The rights issue is for EUR35m at a price of €0.36 per share. The preferential subscription rights on the day of announcement were worth EUR0.22 (equity price was EUR0.66). The Subscription period runs from the 5th to the 19th of June 2021.
- An additional EUR35.5m come via a private placement and are not subject to subscription rights. They will be issued to the Amodio family.
D/E Swap:
Finally, EUR68m of Senior Bonds opted to equitise 30c/EUR of their claim in return for equity issued at EUR0.74. This requires the issuance of a further 92m shares.
Fees:
To cover €5.2m in arrangement and backstop fees, a further 14.3m shares will be issued at the same time as the Rights Issue and private placement, at €0.36.
Positioning:
We are long the OHL 2022 unsecured bonds for 6% of NAV, at 72 cents. We estimate that the package has an intrinsic value of 80 Euro cents. Once this last slice of the restructuring is complete, management can get on with running the company.
Happy to discuss the details and any ideas.
Aengus
_______________________
E: amcmahon@sarria.co.uk
T: +44 203 744 7055