Europlasma files for Chapter 11
Europlasma files for Chapter 11FINANCING ISSUE
Europlasma could not bring to fruition plans to recapitalise/dispose assets. It filed for the French equivalent of Chapter 11 which opens a 6-month process. Trading should resume on 29/01/2019.
FACT
Difficult markets by Q4 18 put paid to Europlasma’s plans to launch a rights issue and then to finalise the possibility of a partial disposal. Bond holders (€5m), due to be repaid by the close of 2018, effectively pulled the plug. On 22/01 Europlasma stopped paying its debtors with the agreement of the Court. This was made public on 25/01 at the close.
ANALYSIS
“Cessation de paiements†means that the group and its subsidiaries have to go through a redressement judiciaire (some sort of a Chapter 11) whereby debt payments are pushed back so that the firm can operate if it is found to be cash generative.
Courts decide about the hierarchy amongst stakeholders. Staff comes first as a rule and tend to bite disproportionately. Obviously, shareholders are left with little say. From the point of view of the latter, it all amounts to a bet on Europlasma’s net asset value. On the pre Chapter 11 metrics, this was estimated at €0.23.
The above quote was for a running concern. Asset buyers will try and impose their terms and the longer the wait the more likely it is that key staff will leave.
IMPACT
AlphaValue will keep an eye on developments over the next three months and comment. This is most likely to include trimming the net asset value.
Europlasma SA. Europlasma SA is a France-based company that offers a range of solutions for hazardous waste treatment. The Company's technology allows converting toxic waste into reusable materials. The Company is composed of four entities, such as Europlasma Torch & Process, which provides engineering consulting for hazardous waste treatment, and sells and licenses its plasma torches and technology; Inertam SAS, which specializes in destruction and valorization of asbestos waste and operates ash melting units; CHO Power SAS, which supplies technological solutions for the efficient transformation of biomass and waste into electric energy and Europe Environnement, which offers ventilation and air cleaning systems for industrial applications.
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