Thu 01/31/2019 11:32 AM
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CLARIFICATION: The amount of bonds purchased in the company's internal dealing transactions of January 2019 is €179,000 and not €460,000 as per Reorg's previous article. The story below reflects these changes along with an updated capital structure.  

Relevant Documents:
Q3 Press Release
Q3 Report
Q3 Presentation
SECI 2017 Report

Officine Maccaferri’s holding company SECI is planning to dispose of some of its non-core biogas and energy assets and use about €100 million of proceeds to delever the group’s capital structure, sources close to the matter told Reorg.

The Italian holding company, which has about €100 million of debt, is planning to complete the asset disposals in the next four to six months, sources said. According to its 2017 report, the latest available, the holding company had €82.1 million of bank debt and €150 million of total debt.

SECI owns several companies operating in food and agriculture, mechanical engineering, tobacco (Manifatture Sigaro Toscano), energy, real estate and biotechnologies.

Reorg reported in December that operating company Officine Maccaferri’s management was evaluating a number of different initiatives to refinance its €190 million 2021 notes. Those initiatives may include tapping the bond market, the loan market and/or repaying a portion of the bonds through the sale of a minority stake in the company.

Given the weakness of the European high-yield market, the company is now focusing on refinancing options mainly through banks or selling assets through M&A operations, sources said.

Today, the company’s €190 million 2021 notes have risen 1-1/2 point to 84/86, sources added. The bonds increased in price over the past week as investors are getting more confident about the company’s deleveraging and liquidity position, as well as for the notes’ purchase by Maccaferri’s board member Marco Costaguta and head of strategy Simone Romano, who bought a total of €179,000 of the notes at 69/72 at the start of January, according to the company’s investors relations website.

Officine Maccaferri's capital structure is below:
 
In December 2018, responding to a Reorg’s question on the company's operations with Italian construction Astaldi and CMC di Ravenna, both of which filed for concordato, Maccaferri’s CFO Andrea Esposito said that the exposure to those groups is minimal.

"We are not a construction company even if sometimes we are considered in the same group. We have a very limited client concentration, diversified also in terms of business and geography. Minimal exposure to Astaldi and CMC Ravenna, and just few millions with Salini Impregilo, and mainly for non-Italian projects,” Esposito said. About 13% of the company’s revenue comes from Italy.

The CFO said the company’s net debt at end-2018 will be higher than in 2017, when it had net debt of €122.3 million. However it will drop sequentially compared to the €172.9 million reported in the third quarter due to an increase in turnover. During the last call with investors, management said leverage will fall below 3x and the company will have €40 million of free cash flow in the fourth quarter of this year.

During the last call with investors, management guided a 2018 EBITDA of €47 million to €48 million from €44 million in 2017, sources said.

Officine Maccaferri’s third-quarter revenue grew 12.3% year over year to €136.1 million from €121 million in the third quarter of 2017. Operating costs grew at the same rate of 12.3% to €123.32 million in the quarter. EBITDA came in at €12.8 million, 12.3%, or €1.4 million higher year over year. EBITDA margin was stable at 9.4%.
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