Sectors > Top Reports > Selecta Memo 090920

Selecta Memo 090920

Selecta. Our Turnaround Plan To Get EBITDA (IAS 17) Up To €280m, Higher Than Selecta’s Restructuring Plan. SSNs Worth At Least 63 Short Term, Longer Term ≥ 80. Buy
PUBLISHED: 09 September 2020
PAGES: 123
SUBMARKET: Selecta, Top Reports, Top Reports,


Why Read?

  • Understand 5 key levers Selecta has to outperform its Restructuring Plan EBITDA and unleveraged FCF forecasts to achieve Potential EBITDA (IAS 17) of €280m
  • Understand how we value the restructured package proposed for Selecta’s SSNs and why we believe the restructuring proposal is sound and attractive for a broad base of SSNs holders 
  • Understand alternative restructuring scenarios that could achieve higher recoveries for SSNs
  • Understand exit routes from the New Holdco PIK Preference Shares envisaged in the restructuring proposal 
  • Understand our estimates of the unit economics and IRRs Selecta can achieve on its POS park
  • Understand why we believe Selecta’s POS park is adequately invested 
  • Understand how intelligent vending machines could represent a major opportunity for Selecta 

What’s New?

  • Assessment of Selecta’s restructuring proposal vs alternative restructuring scenarios that allocate post-reorg equity to SSNs
  • Assessment of eventual M&A exit routes
  • Estimating IRRs on Selecta’s POS park based on our estimated composition of Selecta’s POS park across coffee / hot drinks machines, public combination machines and water dispensers, each further split by manufacturer and model

Questions Answered

  • Will CDS trigger if the proposed scheme is implemented, will the New 1st and / or 2nd Lien Opco SSNs be deliverable and what CDS payoff would result?
  • If CDS does not trigger, where will it trade?
  • Is it better to be long risk through SSNs or CDS?
  • To what extent has the Pelican Rouge acquisition undermined Selecta’s financial performance?
  • Should SSNs holders seek equity upside in the restructuring or settle for what is on the table currently?


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