The sale of 75% of Ellactor’s renewable energy activity to Motor Oil will improve the repayment visibility of the listed company, Fitch Ratings said in a report, noting that it would allow the company to repay a € 670 million bond at or before from its expiration in December 2024, despite the risk that they will become due before the conclusion of the agreement.
The house estimates that the proceeds from the sale, in combination with the existing liquidity of the listed company, should be sufficient to repay the bond of 670 million euros of Ellactor at the date or before its maturity date in 2024.
He adds that the sale of the RES activity has been agreed between the major shareholders of Reggeborgh Invest BV (which holds 30.52%) and Motor Oil as part of the framework agreement by which MOH acquired 29.87% of the shares. of Ellactor in May 2022.
The value of the RES activity has been agreed in the amount of 1 billion euros, on a “debt-free – cash-free” basis and with normalized capital movement, while it will be subject to profitability-related adjustments. The transaction is subject to corporate and regulatory approvals.
According to Fitch, the bond risks being required if the voluntary public offering recently announced by Reggeborgh for the acquisition of other existing shares of Ellactor for 1.75 euros per share leads to a change in the terms of the bond of 670 million euros before complete the sale of RES. Such a development may pressure Ellactor’s liquidity, but it is estimated that this risk is mitigated thanks to the safeguards provided by some Greek banks, the house notes.
Although Motor Oil has publicly announced that it will not participate in the public offering, Reggeborgh Invest may become the actual holder of more than 50% of the total voting shares as a result of the offering and cause a “change of control event” by requiring Ellaktor to buy the bonds at a price equal to 101% of the capital plus accrued and unpaid interest.
After the completion of the sale of RES and the repayment of the bonds, the new majority shareholder may decide to abolish the financing platform created by the group.
The house emphasizes that it would also expect the new majority shareholder to decide to proceed with a new capital structure of the reorganized company.
Fitch will reassess Ellactor’s new business profile when there is greater certainty about the process and details of its new capital structure and future strategies.
“We understand that RBI has found the funds needed to proceed with the public offering and does not intend to raise cash from Ellactor and cover it, even in part,” the house concludes.
Source: Capital
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