OHLA - comment
The Amodio family will be squeezed towards raising more capital by their banks, even if the price means more dilution for shareholders and loss of control. We expect a deal to be completed as the alternative is creditors taking control. The Mar-25 bonds are trading at 91.25 (down 0.5 points since the equity raise was announced) and we will consider exiting as soon as this transaction is solidified (in the next two weeks). The Atitlan deal offers €75m immediately and another €75m (with shareholder follow-on rights). Atitlan’s offer would leave the fund as the largest shareholder (36% vs 17% for the Amodio’s). If Atitlan underwrote the second tranche and the Amodio family did not follow its rights, then Atitlan would have 51% of the equity vs. Amodio’s 13%. The alternative is €26m from the Amodio family and €25m from another Mexican investor (where the other €50m would come from is unclear). Atitlan would also appoint a CEO. The second option would leave OHLA short of cash around the repayment of the first tranche of bonds in March 2025. It is unlikely to persuade the banks to release cash collateral. The Amodio’s need to find another €25m, whilst their banks and OHLA’s board may prefer the bird in the hand.