Aldesa Memo 150519
- Understand the background behind Aldesa’s difficult 2018 and the precipitous drop in bond price
- Understand why Aldesa’s situation is different to the failed Astaldi and CMC Ravenna
- Understand the distinction between Restricted Group and Unrestricted Group and the importance of zoning in on the Restricted Group
- Understand valuation assumptions around the Unrestricted Group and its importance vis-a-vis the bond maturity
- Understand the working capital cycle and how it impacts FCF generation
- Understand catalysts and risks for the long thesis
- Understand options available to the company in order to meet bond maturity
- Understand Aldesa’s valuation sensitivity to working capital, new orders and cost of capital in terms of equity cushion and debt coverage
- Understand the difference between recourse and non-recourse debt as it impacts Aldesa’s ability to meet its debt servicing obligations at the Restricted Group
- Understand in detail the Concessions business within Aldesa
- Valuation of assets within the Unrestricted Group and Concessions business, both using Aldesa’s high cost of equity but also from the perspective of potential infrastructure fund buyers
- Valuation sensitivity analysis – understanding impact of working capital, new orders and cost of capital
- Discounting the importance of consolidated numbers when assessing Aldesa’s ability to repay / refinance the bonds
- Focusing on the Restricted Group metrics with potential for cash proceeds from asset sales within the Unrestricted Group
- What is our base case valuation of Aldesa and its key sensitivities?
- Can Aldesa generate sufficient FCF to refinance / repay its bond maturity in 2021?
- Where will Aldesa be in terms of liquidity when the RCF matures in 2020 and nearer the maturity of the bond in 2021?
- View, Variant Perception & Recommendations
- Business Overview
- Key Events
- Restricted Group
- Valuation & Sensitivity Analysis