Atenor Preparing its way out of the crisis situation

Yesterday, Atenor hosted its 1H23 analyst call at which management presented a strategy to improve its debt situation. A main element is the planned rights issue slated for September. Management refrained from giving operational guidance for FY23-24 due to the preparation of the capital raise, most likely as a prospectus is being drawn up. The capital raise mainly intends to avoid higher financial costs and a debt spiral. The company has to refinance short term debt as the pipeline sales have dried up due to the sudden sentiment change. Interest rates have shot up and due to its high debt ratio, banks charge a higher margin. Instead of fire-selling assets at heavy losses, Atenor is looking for partnerships to transfer assets at manageable pace and conditions. Atenor plans to reduce up to €300m in debt by FY24-end and reduce the debt ratio to 66%. The project portfolio is also expected to decline to 1.0m sqm by June'24. However, Atenor has the support of its reference shareholders who are prepared to proportionally underwrite the rights issue. A successful capital increase could be a first step to recovery by lowering the debt ratio and avoiding high interest costs on refinancings. It will also buy some time to further negotiate partnerships to realise cash against completed assets. After tweaking our model, we maintain our ACCUMULATE rating but lower our TP from €47.0 to €32.0.