Mobico - comment

We are shorting the Perps for 4% of NAV at 64p/£. Management had prepared us for a low figure, and £24m upfront, plus £5.5m of deferred consideration, will do little to deleverage. Still, the removal of these assets does something other than just shield the company from franchising risk. Following the RCF lender consent we found in the Q1 filing, the EMTN release follows as a matter of procedure. Creditors are now fully conditioned to be restructured. Where the guarantee had value was not enforcement but procedure. With WMTL as a co-obligor, a Mobico Part 26A plan impairing the guarantee would have needed to address WMTL as a separate entity — separate class meetings, a separate no-worse-off analysis for WMTL creditors, and a more complex relevant-alternative exercise covering both companies, offering unnecessary surface for creditor attack. What remains now is a clean single-entity, ready for a Part 26A plan against one class of pari passu unsecured holdco creditors, with a thin administration recovery as the relevant alternative. That is about as company-friendly a restructuring posture as English law allows.