Consolidated Energy - comment
The multiple paid for the stakes in CNC and N2000 is at the high end of what we would expect, but not outrageous. The $100m cash that Proman is also paying will help the $227m May 2027 maturity. CONSEN may call this SUN in Q2 to prevent it from becoming current, but the company has been willing to wait until liquidity is stronger, and if the lending banks are amenable, could do so again. There is an investor call scheduled for 10th February to review the details of this transaction; however, the details are not yet available.
The $424m intercompany loan to Proman is being repaid via $100m in cash from Proman and its stakes in Caribbean Nitrogen Company (30.3%) and N2000 (27.2%). The equity stakes are valued at $373m, and subsequently CONSEN will consolidate both companies (CNC 72% stake, N2000 67%).
We estimate FY25 CNC EBITDA at $50m and N2000 at $60m => $31m of EBITDA. CONSEN will also gain control and consolidate cash of $74.7m. The effective multiple is therefore around 9.5x. Given that Nutrien has shuttered its own Nitrogen plant in Point Lisas, a valuation of 8.0x is more in line with our analysis.
Proman also paid US$14.5m in cash to the government, given the expectation of a settlement nearer US$150m, more is likely to come.