DIC Asset - comment

DIC expects year-end property valuations to be -4% to -7% down, with a book LTV (never mind our estimates) of 55.3% and a maintenance covenant of 60%; meaning that covenant for FY23 will be difficult. DIC needs to sell assets, but the discounts on these asset sales threaten the LTV covenants in the bonds. Management has promised €300m - €500m of asset disposals, but execution is slow. Buyers know the pressure the company is under and are pricing their bids accordingly. Liquidity of €481m on June 30, falls to €130m once the €200m bridge repayment (made in July) and the €150m bond repayment in October are included. Additionally, DIC has €200m in bridge refinancing in July-24, along with €133m in bank debt. The hat is empty and any white rabbit must still be backstage.