Why Read?

• Understand why, in spite of a substantial liquidity shortfall we estimate in Q2 20, at levels of c. 33 cents we see good return potential in Hema’s Senior Secured Notes (SSNs) via various possible restructuring implementations
• Understand our assessment of probabilities and SSNs recoveries across scenarios – various restructuring scenarios; a scenario where Ramphastos injects new money and targets an eventual sale of Hema to Jumbo; liquidation

What’s New?

• Coronavirus-updated quarterly liquidity shortfall estimates and analysis of liquidity swing factors
• Full coronavirus-updated financial projections, valuation and sensitivity analysis
• Restructuring pitchbook for SSNs holders – act fast and what to do (rationalization and other initiatives; new money need); potential recoveries / IRRs / money multiples
• A strategy for Ramphastos to deleverage Hema rapidly and sell out to Jumbo – potential IRR and money multiple for Ramphastos 
• Liquidation analysis
• Recent general retail store footfall data in Hema’s key markets
• Legal background – Dutch Bankruptcy Act; UK schemes of arrangement; UK pre-pack administration; indenture analysis

Questions Answered

• How are Hema’s revenue and expenses likely to adjust during the coronavirus lockdowns?
• What ability does Hema have to flex expenses and / or benefit from government employment subsidies?
• How tight is Hema’s liquidity already and what liquidity shortfalls to we project by quarter in FY 20?
• Is the RCF minimum EBITDA covenant likely to be breached?
• What is the risk of cross acceleration via a default on the PIK to the RCF and in turn to the SSNs and Senior Notes (SNs)?
• Why is it essential that Hema’s SSNs holders prepare pro-actively to restructure and inject new money into Hema?
• How should SSNs holders look to restructure Hema? Jurisdictional analysis and legal implementation. Business turnaround initiatives. Exit possibilities. Recoveries, IRRs and money multiples
• What can Ramphastos do to profit from the current situation and preserve a potential exit sale to Jumbo after weathering the coronavirus storm?
• What would the SSNs recovery rate be in liquidation and what are the key swing factors?
• Why should Hema’s landlords be worried and which actions should they expect Hema to take going forward?
• What risks does Hema pose to its franchisees and vice versa?