Selecta Memo 090920
- 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
- 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
- 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?
- View, Variant Perception & Recommendation
- Restructuring Analysis
- Potential EBITDA
- Exits From New Holdco PIK Preference Shares – M&A Possibilities
- H1 2020 Results Analysis
- Base Case Financial Projections & Valuation
- Comparative Data Points – Facilities Management Companies; Workplace Footfall
- Vending Machines – Unit Economics & IRRs
- Is Selecta’s POS Park Underinvested? Threats & Opportunities From Intelligent Vending Machines