Relevant Documents (in Italian):
Oct. 15 Competition Authority StatementCompetition Authority InquiryAuthority Trial RulingManutencoop Defense
Manutencoop’s 8.5% bonds have fallen 22 points to the 50s after the Italian service group told bondholders that one of its public clients is considering pulling its school cleaning contract following an
antitrust ruling. The four-year contract, which had been awarded through Italy procurement entity Consip in 2014, is worth around €116 million, the sources said.
Investors are worried about the overall impact the cancellation may have on the company’s Consip-related contracts, which represent over 50% of Manutencoop outstanding future tenders, according to sources familiar with the situation. Public sector contracts represent around 38% to 40% of the Manutencoop’s revenue.
In an email to creditors Monday, the Italian service contractor says that if Consip terminates the agreement, “it may also exclude MFM [Manutencoop Facility Management] from future Consip tenders with the same object, as well as inform ANAC (Autorità Nazionale Anticorruzione, Anti Corruption National Authority) of the termination, as required by law[.]”
The procedure to determine whether the contract shall be terminated is expected to conclude within 30 days from receipt of the communication by Manutencoop, on Feb. 4.
The Italian Competition Authority fined Manutencoop €48.5 million for the infringement of competition rules in a tender for the cleaning services of school buildings, as reported by Reorg Research. The fine represents approximately 6.5% of 2014 revenue on an unconsolidated basis.
Manutencoop told investors it is appealing the merits of the decision before the Administrative Regional Tribunal, or TAR, based in Rome, and
published its defense. The company is also requesting the suspension of the enforcement of the decision and of the obligation to pay the fine. However, if the request is rejected Manutencoop will need to pay within 90 days from the decision's notification on Jan. 20. Management is preparing an action plan in order to ensure sufficient liquidity to address any payment obligation. Manutencoop reported its
results on Nov. 16.
In the first nine months to Sept. 30, EBITDA fell 4.7% to €70 million from €73.5 million year on year, with revenue at €696.6 million, down 2.6% from €715.4 million year on year. The company reported a 51% decrease in cash and cash equivalents to €55.24 million, from €113.38 million on Sept. 30, 2014. and down sequentially from €66.3 million in the
first half. Other credits and noncurrent activities amounted to €6.61 million.
Net debt at the end of the period was €285.86 million adjusted for factoring of €1.41 million, while gross debt was €346.31 million.