Hema Memo 041119
- Understand how tight Hema’s liquidity is likely to get by Q2 2020 and why the limitation on liens makes provision of additional funding by Ramphastos challenging
- Understand how Hema would likely be restructured under Dutch bankruptcy proceedings or a pre-pack sale thereunder
- Understand the likely new money financing needed in any debt restructuring at Hema and why recovery even on Hema’s senior secured notes is likely to be just c. 20 cents
- Understand why liquidation is a non-negligible possibility
- Understand why the previous turnaround from FY 15 will be difficult to repeat this time around
- Understand the extent to which and why Hema’s business has been structurally deteriorating since 2010, in spite of significant capex over FY 17 – FY 18
- Restructuring analysis of Hema
- Detailed liquidity and cash flow projections with sensitivities
- Detailed valuation of Hema – both based on comparable multiples and DCF
- Wholesale bakery / food supply business multiples analysis applied to Hema’s bakery business
- Comparison of Hema’s current predicament to that in FY 15
- How is Hema’s liquidity likely to evolve?
- What is Hema’s bakery business likely to be worth and what are the prospects for selling it?
- What scope do the notes indentures provide for Ramphastos to safely provide additional secured funding to Hema?
- How do Dutch insolvency proceedings work and how would Hema likely be restructured?
- What is the risk of maintenance covenant breach on Hema’s RCF and cross-default / cross-acceleration through to Hema’s senior secured and senior notes?