AMADEUS: COVID-19 UPDATE - CAPITAL INCREASE AND CONVERTIBLE BOND ISSUANCE (ANÃLISIS BANCO SABADELL)
Accelerated capital increase and convertible bond issuance. BUYAt yesterday’s closing bell the company announced a € 750 M capital increase (placed today at € 39/sh. with a -5.7% discount vs. yesterday’s closing price; 19.2 M new shares, 4.5% of the capital) and the issuance of a convertible bond for the same amount in view of the uncertainty generated by the impact from COVID-19 on the business (it sees drops of -25%/-30% in 1Q’10 sales vs. -21% sales’20 BS(e) in the central-case scenario). This brings the company’s liquidity to above € 4 Bn, which it believes is enough even in an extremely adverse scenario (improbable) in 2020, which extends to the end of the year the current situation brought about by COVID-19 (-80% air traffic drop through 4Q’20). We think these measures are positive, as they dispel the uncertainty surrounding liquidity and help to maintain the company’s investment grade. Against the current backdrop the discount is not very large, and it has a mildly dilutive effect (-1.4% on T.P. of € 59/sh. in our base-case scenario, which we cut -8% to € 54/sh. after adapting our estimates to the latest IATA scenario).
Amadeus is a transaction processor for the global travel and tourism industry. Co. provides transaction processing power and technology solutions to both travel providers (including full service carriers and low-cost airlines, hotels, rail operators, cruise and ferry operators, car rental companies and tour operators) and travel agencies (both online and offline). Co. acts both as a worldwide network connecting travel providers and travel agencies through a processing platform for the distribution of travel products and services (through the Distribution business), and as a provider of a portfolio of IT solutions which automate certain business processes (through the IT solutions business).
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