Accentro - comment
Today’s offer of fresh equity comes with strings attached that would shift risk back onto bondholders, in return for an underwhelming amount of fresh cash. The trickiest bit in today's offer will be persuading bondholders to extend maturities and amend the bond coupon (in addition to waiving the change of control). We do not believe that Accentro has the cash to make the required December bond redemptions, nor do we think it can make the asset sales necessary over the next 18 months. The non-binding offer from Shinhan AIM and NOX capital would bring in €20m of cash and leave the purchasers with up to 70% of the equity (including Brookline’s shares). The injection is less than the €50m initially suggested, and bondholders will bear most of the additional risk. The €20m is an option on the recovery in German residential property. We await the details of the offer to bondholders.