Intralot - Post restructuring
All,
Please find our post restructuring analysis of Intralot here.
Our thesis that the 24s might be able to better their position vs the 21s did not come true, but at least the backup did: that we would not lose money if they failed. Despite our inability to trace a giant €25m of budgeted annual EBITDA improvements within the ROW part of the company, we acknowledge that the company should see a benefit from the re-opening of its various markets.
Restructuring:
- The 21s have won. The new SSNs rank structurally sr. against the company’s most prized asset - the North American business.
- Sane 24s holders who didn’t convert still hold exposure to 66% of the equity of that asset and to a cash balance, most of which remains needed for operations and legal fees, offset by the cash-burning ROW operation.
- The reduced 24s now place a value of zero on the international operation.
Positioning:
We remain long the 24s for 4% of NAV while the company should benefit from the reopening of economies. We do not expect Intralot to meet its management budget - or to come even close. But any improvement over LTM and the conclusion of the restructuring might yet cause the market to improve its valuation. We anticipate selling the position later this year.
Wolfgang
E: wfelix@sarria.co.uk
T: +44 203 744 7003