(BFM Bourse) – The operator of retirement homes and clinics is launching its third capital increase this Thursday, amounting to 390 million euros. Above all, it is the last chapter of a historic restructuring, aimed at restoring Orpea’s financial situation.
Never two without three. And this famous expression also applies to Orpea, which announced this Thursday the launch of the third and final capital increase, part of a procedure which should help the company regain financial balance.
This third fundraising aims to complete the major restructuring of Orpea, which began last November with an initial capital increase of nearly 4 billion euros. This operation was followed by a second fundraising the following month, aimed at facilitating the takeover of a group of shareholders led by Caisse des Dépôts.
A discount of almost 7%
Orpea unveils the terms of this third part of its restructuring, allowing it to erase part of its debt and regain better financial health. This new fundraising of 390 million euros – issue premium included – provides for the maintenance of preferential subscription rights (DPS) and will result in the issue of just over 29.3 billion of shares, at the subscription price of 0.0133 euros per new share.
According to the parity communicated by Orpea, each DPS will give its holder the right to subscribe, on an irreducible basis, at the rate of 7 new shares for 31 DPS held. These rights will be detached on January 19, 2024 and then negotiable from January 19 to 31, 2024 inclusive.
The group led by the Caisse des Dépôts, the financial arm of the State, with Maif, CNP Assurances and MACSF (mutual health professionals), has undertaken to subscribe by exercising its preferential subscription rights, up to approximately 195.7 million euros (each for its own amount and without solidarity). The balance, approximately 194.3 million euros, being guaranteed by the members of SteerCo, a group designating five institutions having coordinated a group of financial creditors of Orpea.
Based on the closing price of the Orpea share on Tuesday January 16, the subscription price of the new shares of 0.0133 euros shows a face discount of 6.99%.
At the end of this third call to the market, the group led by the Caisse des Dépôts et des Consignations (CDC) will own 50.1% of the group’s capital. Unsecured creditors will hold 48.8% of the capital. The remaining 1% of the capital will correspond to the float, i.e. the share of the capital tradable on the stock market.
A lowered profitability target for 2023
The funds raised during this third fundraising will be dedicated to financing the general needs of the group, and in particular its refoundation plan, announced in November 2022. The house operator unveiled this roadmap after the scandal which followed the publication in January 2022 of the investigative book “Les Fossoyeurs” by journalist Victor Castanet.
This recovery program provides for Orpea to post an Ebitdar margin – its main profitability indicator – of 19% and net debt reduced to nearly 3.6 billion euros by 2026.
On the sidelines of this third operation, the company indicates that it has adjusted its profitability forecast for 2023 downwards, citing higher than expected personnel costs. It now expects an operating profit before rental charges, depreciation, provisions, interest and taxes (Ebitdar) of 690 million euros, an amount 2.8% lower than the objective of 710 million euros revealed last November. .
It also confirmed all the prospects for the 2024 financial years and the following two, as announced on November 10. For 2026, the company now expects a turnover of 6.4 billion euros, for an occupancy rate for all of the group’s activities of 90.8% in 2026. Operating income before rental charges , depreciation, provisions, interest and taxes (Ebitdar) is expected at 1.2 billion euros when the balance sheet should be based on financial leverage reduced from 7.6x in 2025 to 5.5x in 2026.
If this rescue plan will allow Orpea to start again on a healthier basis, for the existing shareholder, this restructuring will leave a bitter taste. Unitholders suffered significant dilution and a significant drop in the value of their shares after these fundraisings.
On the Paris Stock Exchange, the operator’s share price fell slightly by 0.7% to 0.014 euros around 3:20 p.m., a level lower than the theoretical price of 0.02 euros post-financial restructuring that the company had calculated in the month of October. Over one year, Orpea shares lost 99.65% of their value.
Sabrina Sadgui – ©2024 BFM Bourse
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