“If they are trying to restructure creditors, there would be no way the CEO would be talking in the press about a 2022 IPO," independent special situations firm Sarria said. “It is important they paid the coupon and the CEO talks about EUR 1bn online sales and Christmas sales being down less than 10% plus the 2022 IPO. None of this would happen if they were kicking off Germany’s biggest test of its new insolvency regime. It wouldn’t happen in this order – they could do an A&E.”
Read More“Post pandemic this should be a GBP 80m-100m EBITDA company again and it's not overly levered on that basis,” Sarria continued. “Give it time and they will be alright. Nobody gains from pulling the plug. If you take a long term view, the first liens continue to be covered, but the second liens might be testing [shareholder and founder John] Hargreaves’ resolve one more time.”
Read MoreThe impact guided in 2Q20 was an expected fall in orders in 3Q20 and this is exactly what happened. In this context, 3Q20 was unusually good as there was a stronger EBITDA and better than expected results against a 10%-17% guided order intake decline, special opportunities firm Sarria said. “The order intake has already [gone] to normal levels and 4Q20 should return to previous EBITDA and revenue levels,” they added.
Read More“This is KKR’s third management team,” said a source at Sarria, an independent special situations firm. “It's a difficult sell that this time the story is different.”
Read MoreSpecial opportunities firm Sarria had three of its theses confirmed from today’s call. Firstly, that other debt collectors have written down portfolios and Lowell could next quarter. Secondly, that management seem confident the equity injection will stay, and they want the business to grow. Thirdly, that the company may have accelerated collections, either through selling NPLs or offering deals to delinquents for one-off payments.
Sarria had been looking to bring a group of bondholders together to structure a refinancing plan, as reported. It also previously held a conference call for noteholders, as reported.
Read MoreWater utilities are highly regulated entities and under the recently-agreed budget, the company has good visibility of its future earnings and must manage expenses accordingly, special opportunities desk Sarria noted.
Read MorePlease find the link to the recording of the full conference, which includes our presentation, here:
https://www.youtube.com/watch?v=CQsC5WZvjWA&feature=youtu.be
Read MoreIn 2019 there was a major short on the name but this was due to heavy one-offs and cashflow generation coming purely from factoring and inventory facilities, Sarria noted. But while there could be a 3Q EBITDA
Read More“Simply put, a takeover bid will involve a degree of deleveraging, which is a positive for the B notes. And if no bid happens, the company will pursue alternative methods to deleveraging, either rights issue or more likely an equitisation of the B notes. That’s when the differing motivations of the B note holders will become apparent,” Sarria said.
Read MoreIndependent buy-side desk Sarria is looking to bring together a group of Lowell bondholders and additional funds and structure a refinancing plan that it aims to take to the UK-headquartered debt purchaser, according to two sources familiar with the situation. The initiative was started by Sarria together with a sizeable client, with the aim of relaunching the refinancing process that stalled after talks with a group of wall-crossed funds broke down in July.
Read More“The CABB business is resilient in this kind of COVID environment and there is revenue visibility on contracts. The end-markets are mostly in the relatively stable agrochemical sector, with the remainder of the exposure also very diversified,” Sarria noted.
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