OHLA - comment
Concern over liquidity resulted in the downgrade to Caa1. Moody’s review provides some clarity around the reason for the cash raise, whilst OHLA had sufficient cash to operate, it was below the minimum level the banks wanted held at the central level. The timing of the Kuwait judgment was terrible for the company, and the banks demanded cash rather than offer a waiver. There is little trust between the banks and the Amodio brothers, and OHLA needs to work to improve governance and communication. We forecast that cash flow generation will improve over the next 18 months, and we expect to see progress on the sale of the Canalejas stake.