Polarcus (No_rec, TP: NOK) - Running out of options
With near-term covenant issues and liquidity challenged by end-2018e, we believe Polarcus will need to find a sustainable balance sheet solution, including debt reduction and an improved liquidity runway, possibly opening the way for subsequent industry consolidation. In our view there is a risk that a restructuring will be dilutive for shareholders. However, as the equity is now only 5% of the EV and volatility is likely to be high and somewhat unpredictable, we now have NO REC on the stock (previously SELL, previous target price NOK1).
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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