Scatec (Sell, TP: NOK55.00) - Capital structure reset warranted
We believe rising interest rates have fuelled investor concerns about Scatec’s leveraged capital structure, with NOK8.6bn of debt on the corporate level (with ~80% on floating interest rates) on top of highly geared subsidiaries. Despite some additional liquidity from asset sales, the company is still not fully funded to build the projects in its backlog, on our estimates. We reiterate our SELL and have lowered our target price to NOK55 (65) on higher long-term interest rates and a lower valuation of the hydropower plants in the Philippines. We believe the company would need to address its capital structure to spark investor attention.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.