Amara - comment

Details of the restructuring plan are only coming through in waves. We understand there will be a drop-down of the entire business into a new vehicle, although we imagine that holdings are still diverse and that, therefore, all creditors are allowed to participate. We have not heard of a new money element from bondholders. By contrast, Cinven would apparently invest €40m to stay in the game, and bondholders would write off the vast majority of their balance. We imagine, therefore, that the new entity would have equity value of approx €80m - if 51% owned by the old entity (then debt free), which is owned by Cinven. We expect the bonds then to hold the other 49% for approx. €38m. On top of that, the bonds would reinstate perhaps some €50m in PIK notes or similar at the new entity - possibly more, but not trading much better. Please note that these figures are our own, based on our understanding of the nature of the situation.

Amara remains Spain’s dominant distributor of solar equipment, and long-term trends remain supportive, but it has to go through a deep valley before reemerging.