Selecta - comment

The 1Ls are creating Selecta now at a mere 40% of what it was worth only a year ago. We are not suggesting that was the right valuation then (we thought it was), and we haven’t had fresh numbers from the company in a while, but a drop by as much as this seems out of context, even in the current economic environment. The trouble is, of course, the meagre cash flow. Rumours have it that the Committee is proposing to inject €150m super sr. and take equity pro-rata while preserving some value for the 2L. However, a small group of 1L-only holders have announced plans for a counteroffer. Bonds are falling further.