Cerba - comment

The tone of the Cerba call continues to centre on self-help measures and cost savings as the Company attempts to grow into its capital structure. The reality is Cerba is running short of liquidity, and shareholders were required to commit an additional €100m of capital through a new note issued pari passu with the Senior Secured Debt. Further divestment of non-core assets may be necessary. By providing capital via the new Incremental Facility Note, sponsors are effectively priming the Unsecured Debt.

Operational performance was broadly in line with expectations. Higher volumes at lower prices resulted in revenue down 3%, while EBITDA margin improved by 130bps, driving €3m of incremental EBITDA, largely due to cost savings.

With shareholders injecting new money, we are reassessing our current short position. We will review the full results in more detail before finalising our view.