ORPEA crippled with debts, raided, announces a huge capital increase!

According to BFM Bourse, the Orpea group is in great difficulty, and the managers believe that it could “run out of liquidity from the start of 2023 and will thus carry out two capital increases. Orpea also aims to increase its margin to 20% in 2025 via massive reduction in real estate and geographic refocusing.

A major financial restructuring.

“But for the current shareholders of the operator of retirement homes, this transformation plan will above all be accompanied by a heavy, very heavy financial restructuring. Orpea had indicated at the end of October that it had to overhaul its finances, the company crumbling under a gross debt of 9.57 billion euros at the end of November. Orpea has thus entered into a conciliation procedure under the aegis of the Commercial Court of Nanterre with its creditor banks.

The numbers are scary!

Over the 2022-2025 period, the company anticipates a financing gap of 5.3 billion euros including 4.3 billion euros in debt repayments and accumulated interest.

The most serious thing for current shareholders is the huge fundraising to come.

Orpea intends to raise nearly 6 billion euros in funds, including more than 5 billion in capital, while its market capitalization weighs ten times less, or 531 million euros only after its collapse on the stock market. This will therefore lead to a massive dilution for existing shareholders who decide not to participate.

Proven risks of bankruptcy.

“Orpea also warns that in the event of failure of the conciliation with its lending banks, the group could not implement the transformation plan presented on Tuesday. A meeting is scheduled around December 1 as part of this process.

The market had also largely integrated the scale of this massive financial restructuring with a loss of more than 90% of stock market prices.

You have there besides the rational explanation with the collapse of the action Orpea. A dilution of 90% is effectively 90% less value, it is still necessary that the group be able to successfully renegotiate its debt and not put the key under the door.

These are huge projects that are opened by the new management of the group of retirement homes.

Source BFM Stock Exchange here

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