Thu 06/03/2021 08:13 AM
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Q1’21 Report

Portuguese fast food chain operator Ibersol is negotiating with lender banks with an eye to “strengthen its medium and long-term capital,” the company said in its first-quarter report, released May 31. The negotiations are aimed at “guaranteeing an adequate financial structure” for the company, which has €19.6 million of debt due this year and a net leverage of 12.7x, post-leases. Continue reading for our EMEA Middle Market team's reporting on Ibersol's negotiations with its lenders and request a trial for access to the linked documents and reporting on hundreds more stressed, distressed and performing credits. 

The company was hit by the Covid-19 pandemic, with revenue and EBITDA falling by respectively 40% and 63% in 2020 due to consecutive lockdown measures imposed in Spain and Portugal. Sources close to the company told Reorg that Ibersol is now looking for opportunities to restructure its balance sheet, but currently there is nothing specific on the table.

Options to strengthen the company’s balance sheet include a capital increase and the disposal of non-essential real estate assets, sources told Reorg. Portuguese banks are expected to advise the company in the process when it takes place.

The Portuguese publicly listed company has a market capitalization of about €197 million as of June 3, according to Market Watch, and a net debt of €457.3 million including €328 million worth of leases.



EBITDA Multiple

(EUR in Millions)





Bank Loans/Overdrafts - State-guaranteed loans 1


Bank Loans/Overdrafts - Others 1


Commercial Paper 2


Total Financial Debt



Lease Liabilities


Total Other Liabilities



Total Debt



Less: Cash and Equivalents


Net Debt



Plus: Market Capitalization


Enterprise Value



Operating Metrics

LTM Revenue





Other Liquidity


Plus: Cash and Equivalents


Total Liquidity


Credit Metrics

Gross Leverage


Net Leverage


Market cap as of June 2. On Dec. 31, 2020, the group obtained exemption from compliance with financial covenants on €60.2M worth of debt. Other liquidity includes €45 million of unissued commercial paper lines.
1. State-guaranteed funding includes a ICO loans in Spain and financing in Portugal. Loan maturities (as per 2020 annual report): €18M in 2021, €15.5M in 2022, €23.2M in 2023, €8.3M in 2024, €18.4M in 2025, and €0.7M thereafter. Most bank debt indexed to Euribor. Average interest rate for bank loans & commercial paper was 1.24% in 2020.
2. Maturities: €1.6M in 2021, €18.3M in 2022, €34.1M in 2023, €16.5M in 2024, €10M in 2025, and €1M thereafter. Most bank debt indexed to Euribor. Average interest rate for bank loans & commercial paper was 1.24% in 2020.

At the end of 2020, Ibersol was operating 531 self-owned units, 361 of which are in Portugal, 160 in Spain and 10 in Angola, as well as 92 restaurants of group-owned brands operated by third parties through franchises. In 2020, 54 units were closed, 21 of which were franchisees, mostly located in Spain.

The group has long-term franchise agreements with Burger King, Pizza Hut and KFC. The group’s own brands include Pans & Company, Café Pans, Ribs and Santamaria.

Because of the negative effects from the pandemic, Ibersol received a total of about €45 million of state-guaranteed financing aid from both Portugal and Spain, where it operates. It also refinanced €15 million of its existing debt in July 2020. At the end of the first quarter of 2021, Ibersol reported the following state-aid lines and respective use of maturity extension options:

  • A €20 million credit line with Spain’s Instituto de Crédito Oficial, or ICO, with maturity recently extended by three years until 2028, resulting in a €2.5 million reduction in amortization payments. The grace period was also extended by a year;

  • Another €15 million of ICO lines due in 2021 extended by one year; and

  • €14 million of state-guaranteed funding in Portugal, with grace period and maturity extended by nine further months, resulting in a €4.1 million reduction in short-term expenses.

Ibersol managed to obtain covenant waivers for the 2020 tests on €60.2 million worth of its debt, and has been in discussions with creditors for the upcoming year-end tests since early 2020, according to the full-year 2020 report.

During 2020, Ibersol’s 84 units located across airports and train stations registered a passenger traffic drop of about 70%, leading the company to seek adjustments to rents owed to landlords. In that year, this led to €10.4 million of reduced expenses with rent payments.

The company was, however, unable to reach a deal with AENA, the main Spanish airport operator, leading to litigation, which is ongoing. In the first quarter of 2021, the dispute had a €7 million impact on its operating result, the company said.

On March 9, Ibersol’s Spanish subsidiary Pansfood SAU filed a lawsuit against AENA at El Prat de Llobregat’s First Instance Court No. 1 requesting adjustments on €24 million of rent due for 2020 and the rebalancing of guaranteed minimum in rents as a result of decreased passenger traffic until 2026, the company said in its 2020 report.

The group asked the court to grant temporary precautionary measures aimed at preventing AENA from executing €26 million in bank guarantees attached to the rental contracts, which can be enforced if Ibersol fails to meet rental payments. Ibersol argued that the amounts were not due given the extraordinary circumstances of the Covid-19 pandemic. On March 26, the court ruled in favor of Ibersol and ordered the precautionary measures, which effectively halted any enforcement action from AENA.

Company Financials

For the full-year 2020, despite the 40.5% decline in revenue to €288.9 million and 63.6% collapse in EBITDA to €43.6 million, the company’s cash balance grew to €50.6 million, compared with €38.4 million a year earlier. This was more to do with a reflection of the government-backed funding secured in Portugal and Spain. As a result, financial debt excluding leases rose by €44 million to €165.1 million. Net leverage, including €329 million of leases, rose from 6x pre-pandemic to 10.3x at the end of 2020.

A total of €19.6 million of financial debt is due this year and another €33.8 million is due in 2022.

The breakdown of Ibersol’s lease payments by maturity is below:

In terms of segments, the concessions and catering business has had difficulty recovering as a result of continued mobility restrictions during 2020, with most events in the catering channel being postponed or canceled. Restaurants located in airports were strongly affected by the reduction in air travel.

With the Covid-19 third wave leading to renewed restrictions in January, revenue dropped 41.4% year over year in the first quarter to €55.7 million. EBITDA decreased 51.5% year over year to €7.2 million. Consolidated EBITDA margin stood at 13% compared with 15.7% in the same period of the previous year.

The group’s companies in Portugal signed a simplified layoff agreement, which covered about 60% of the employees. In Spain, Ibersol furloughed about 49% of its employees (ERTE in the Spanish acronym). In addition, the company also sought to renegotiate lease agreements to adjust them to the pandemic, resulting in an expense reduction of about €1.6 million.

The company registered €3.1 million of cash flow from operations, while capex in the period was €1.7 million, mainly driven by the group’s expansion in Portugal.

As of March 31, Ibersol’s net debt amounted to €455.7 million, 3% up year over year, while financial debt excluding leases was €168.1 million, slightly over the €165 million reported at the end of 2020, the first-quarter report says.


In 2016, Ibersol acquired the Spanish casual dining restaurant group Eat Out Group for €105 million. Eat Out Group operates 321 restaurants in the retail business, with its own brands such as Pans & Company, Ribs, Santamaría and Fresco, and in the travel division, where it operates 13 other brands as a franchisee.

The company’s shareholder structure includes Portuguese holding company ATPS - Sociedade Gestora de Participações Sociais SA with a 54.91% stake, Bestinver Gestión with 10.33% of shares, Magallanes Iberian Equity holding 3.73%, Norges Bank with 2.06%, MCWIN with 2.95% shares and FMR LLC with 3.07%, according to Ibersol’s latest corporate governance report, dated 2020.

The company’s main shareholder ATPS is a holding company owned by Ibersol’s chairman António Pinto de Sousa and its vice-chairman António Teixeira.

Ibersol started to operate in the foodservice sector in 1989 with the aim of developing the Pizza Hut business, according to its website.

The group will be holding its annual general meeting to present its 2020 financial accounts on June 18.

-- Lucía Camblor, Cedrick Cassin, Laura Vilaça
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