Sectors > Transport & Logistics > Naviera Armas (ATG) Memo 200120

Naviera Armas (ATG) Memo 200120

Naviera Armas (ATG). Misunderstood. Conviction Buy
PUBLISHED: 20 January 2020
PAGES: 215
SUBMARKET: Naviera Armas, Top Reports, Top Reports,


Why Read?

  • Understand EBITDA potential of the business and decomposition of where EBITDA has fallen short vs pro-forma levels (plus synergies) at the time of the Trasmediterranea acquisition
  • Understand our base and bear case liquidity projections and remaining levers
  • Valuation – DCF & asset based
  • IMO 2020 impacts – customer pricing, scrubbers EBITDA impact, hedging derivatives impact and scrubber financing
  • Understand carve-outs for additional secured debt and what mitigates priming risk
  • Detailed fleet analysis – vessels owned, chartered in and chartered out; charter rates; transactions; valuation and encumbrance
  • Waterfall analysis and expected recovery rates across the capital structure
  • Trasmediterranea acquisition analysis
  • Business analysis – segments, regions, clients, suppliers, substitutes, subsidies 
  • Industry overview and competitor analysis
  • Analysis of the capital structure, legal documentation of each debt instrument and bond pricing


What’s New?

  • Detailed financial forecasts, including of liquidity
  • Company-specific IMO 2020 quantitative impact analysis


Questions Answered

  • What is the EBITDA potential of the business, which are the key levers and what further upside exists to our forecasts?
  • Will the business be able to deleverage to the extent needed to refinance?
  • Under what circumstances would liquidity break and which additional liquidity levers remain?
  • Will the business be hollowed out by a steady stream of asset sales where each sale funds the reinvestment required under the asset sale covenant from previous sales but where there is net leakage at any point in time?
  • Why will ATG benefit from IMO 2020?
  • Will ATG be able to fund its scrubber retro-fitting programme and what return on investment will this provide?
  • What recovery can be expected on the Senior Secured Notes?