Safilo sinks in Piazza Affari (-13.88% to 1.34 euros) after the announcement of the next 135 million capital increase aimed at repaying the shareholder loan and to seize new growth opportunities also via M&A. Hal will subscribe its share of the increase (50%) plus any unexercised e the increase will be approved by the shareholders’ meeting on 30 July and carried out within the second half of 2021.
Strategically, comment experts from Equita Sim, the group is strengthened in equity and can continue the growth plan with greater flexibility also for acquisitions, significantly reduces financial burdens (over 8 million annual pre-tax savings from 2022), collects the strong commitment from the main shareholder Hal.
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“On the title, however, we expect a negative reaction”, affirm from the Milanese Sim, in that the market “in our opinion expected a refinancing of the shareholder loan through new debt is not entirely off new equity“, the speculative hypotheses circulated on the stock” lose credibility in the short term, given the commitment of new capital by Hal to continue the turnaround“el” acquisition by EssilorLuxottica of GrandVision (approximately 5% of Safilo revenues) creates an additional risk to manage. Hold and target price of 1.43 euros confirmed.
“Even if we understand that replacing him shareholder debt with debt would have involved a full refinancing process (presumably not feasible in the short term), the issue of new equity is dilutive unless it is the result of significant strategic development. Unless Safilo is close to a new acquisition (which is possible given the activism of the new management), we do not believe we are in this context: the shareholder loan is expensive but has no impact on cash flow and its maturity is in 2026 “, he comments Kepler Cheuvreux. The analysts of Intesa Sanpaolo finally they report that the increase represents approximately 30% of the current capitalization.
The shareholder loananalysts continue, it is expensive and management had announced that its refinancing was a key priority. Intesa goes on to underline that the capital increase would significantly reduce the leverage, with a net financial position / Ebitda ratio down from 4.9 to 1.8, laying the basis for potential market consolidation even if the analysts themselves do not expect it in the short term.