Europcar: stock plunges on financial restructuring
(CercleFinance.com) - The Europcar stock has dived 30% on Tuesday morning after last night announcing that it was in talks with its corporate debt creditors regarding financial restructuring.
The group aims to achieve a sustainable capital structure, which is adapted to its level of revenues, with reduced corporate debt and an appropriate level of liquidity, Oddo says.
The analyst believes that this announcement is naturally not a surprise, noting that given the health crisis, FCF could remain very limited - even in 2021 - so that debt will remain at the heart of questions in the near term, it adds.
Remember that for 2020, we expect FCF of -318 million euros, followed by -52 million euros in 2021 to be compared with a corporate net debt at the end of June 2020 of 1.251 billion euros.
A scenario where part of the debt will be converted into shares ("debt to equity swap") and/or an injection of new money to reinforce liquidity cannot be excluded, bearing in mind that its market capitalisation is currently around 200 million euros, which would mechanically lead to strong dilution, analysts point out.
Oddo maintains a neutral rating on the share, with a target price of 2.20 euros.
Copyright (c) 2020 CercleFinance.com. All rights reserved.
The group aims to achieve a sustainable capital structure, which is adapted to its level of revenues, with reduced corporate debt and an appropriate level of liquidity, Oddo says.
The analyst believes that this announcement is naturally not a surprise, noting that given the health crisis, FCF could remain very limited - even in 2021 - so that debt will remain at the heart of questions in the near term, it adds.
Remember that for 2020, we expect FCF of -318 million euros, followed by -52 million euros in 2021 to be compared with a corporate net debt at the end of June 2020 of 1.251 billion euros.
A scenario where part of the debt will be converted into shares ("debt to equity swap") and/or an injection of new money to reinforce liquidity cannot be excluded, bearing in mind that its market capitalisation is currently around 200 million euros, which would mechanically lead to strong dilution, analysts point out.
Oddo maintains a neutral rating on the share, with a target price of 2.20 euros.
Copyright (c) 2020 CercleFinance.com. All rights reserved.