Why Read?

• Understand why we downgrade our probability of a “straight refinancing” to 30% from 80-85% previously but still see SSNs recoveries across all our scenarios as relatively high
• Understand the advantages Mr Boparan would have in a UK pre-pack administration to acquire UK Poultry and Meals cheaply and why SSNs are weakly positioned to block this
• Understand how SSNs language may allow Mr Boparan to undermine any “credit bid” by SSNs holders in a UK pre-pack sale of EU Poultry and Fox’s Biscuits
• Understand how SSNs could still recover par in an exchange offer scenario, involving maturity extension and a modest coupon increase plus additional New Holdco PIK Notes 
• Understand how Boparan may have been able to increase its LTM LFL Adj EBITDA from £75m in Q4 19 to £108m in Q3 20 and to c. £153m on a Pro Forma Run-Rate basis at Q3 20 and whether the latter is realistic / sustainable
• Understand key indirect related party transactions between the Boparan Holdings Limited (BHL) Restricted Group and 2 Agriculture Limited and Amber REI Holdings Limited (consolidating all its subsidiaries) and potential impact on BHL’s financials, valuation and saleability in a break-up
• Understand probabilities across all our scenarios and implications for SSNs recoveries and CDS payoffs, including issues of CDS deliverability (and with which deliverable obligations), orphaning and type of credit event (if any)
• Understand our estimates of ability to raise debt at Amber REI and Mr Boparan’s personal capacity to inject equity into BHL to support a straight refinancing
• Understand why Boparan may have chosen to use historic disposal proceeds to redeem the old £ 5.25% 2019 SSNs rather than negotiate back then a maturity extension on the remaining 2021 SSNs and what implications this has for the strategies Mr Boparan may have in mind if a straight refinancing is not possible 

What’s New?

• Analysis of two detailed UK pre-pack administration scenarios and one UK scheme-based restructuring of the SSNs and options available for Mr Boparan to protect his interests
• Analysis of indirect related party transactions not apparent from BHL consolidated financials or even those of most of BHL’s subsidiary entities 
• Updated financial projections, DCF and SOTP valuations and sensitivities and listed and transactions comparable multiples for each segment
• Analysis of how the sharp increase from Q4 19 LTM LFL Adj EBITDA of £75m to Q3 20 LTM Pro Forma Run-Rate Adj EBITDA of c. £153m may have been achieved in just 3 quarters and whether it would be sustainable post a refinancing

Questions Answered

• Why do we still see SSNs recovery as relatively high across all our scenarios?
• Can SSNs block a connected party sale to Mr Boparan / his affiliates based on their security? 
• Do Boparan’s related party suppliers make it difficult for SSNs to bid more for BHL than Mr Boparan / his affiliates can?
• Could an equity injection by Mr Boparan make a straight refinancing more likely than we now estimate?
• Can Mr Boparan actually buy EU Poultry and Fox’s Biscuits before any pre-pack sale of these to SSNs holders / a third party?
• To what extent did Boparan actually have a material positive COVID-19 impact on Adj EBITDA in Q3 20 (vs the disclosed negative impact) and how persistent is any benefit from this likely to be?
• What is the combined access to cash of Mr Boparan and his other key businesses outside of BHL and what strategies might Mr Boparan pursue and with what impact on SSNs holders?