An agreement in principle, approved by Orpea, the group led by the CDC and creditors, plans to erase 3.8 billion euros of debt by converting it into capital and to inject 1.55 billion euros of capital additional. At the end of the process, the CDC will hold 50.2% of the capital of Orpea, the creditors 49.4% and the current shareholders, if they decide not to participate in the capital increases which will be open to them, 0, 4%. In detail, 1.3 billion euros will be injected by the Caisse des dépôts, the financial arm of the State, and its allies, including the mutuals Maif and Mascf.
A rebuilding plan
This agreement will make it possible to “very significantly restructure the company’s balance sheet through a reduction of almost 60% of its net debt, a very significant strengthening of its equity” and thus provides “the financial means necessary to carry out our refoundation plan” presented on November 15, commented Laurent Guillot, CEO of Orpea, quoted in the press release.
The arrival in the capital of the company of the group of French investors led by the CDC “is a guarantee of confidence in our profession and our professionals”, noted for his part Guillaume Pepy, chairman of the board of directors. The restructuring of the Ehpad group’s debt will take place within the framework of an accelerated financial safeguard procedure, with the Nanterre commercial court.
Changes in shareholding will also result in changes to the group’s board of directors. It will be made up of seven members appointed by the CDC, the CEO of Orpea, two employee representatives and three independent directors.
The group was in danger of running out of cash
Orpea, in turmoil since the revelations of the book-investigation “Les Fossoyeurs”, a year ago, bent under a colossal debt of 9.5 billion euros and risked running out of cash within a few weeks.
Orpea’s share price had been suspended on Monday, pending an announcement. The action had continued to tumble since the publication in January 2022 of the book “Les Fossoyeurs” was Friday at the close at 7.12 euros, i.e. a capitalization of around 470 million euros. It was still worth more than 88 euros at the end of December 2021.