Hexagon Purus (No_rec, TP: NOK) - Uncertain outcome for equity
While we consider cash-preservation measures the right move to counter the currently weak market, we do not believe these will be enough if the headwinds persist. The NOK2.1bn convertible debt (with ~8% PIK interest) is more than our valuation of the equity, and in our view structural measures are needed to recover any remaining value for shareholders. We consider a sale of non-core assets such as the US BVI business as well as restructuring of the convertible debt likely – and necessary. Given the significant uncertainty and broad set of potential outcomes, we have withdrawn our target price and recommendation.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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