There is never any peace in the Prisa group. Only four months have passed since the last agreement reached between its shareholders to cease hostilities and it seems that things are getting complicated again. The financial paralysis in which the company has plunged in the midst of the Covid crisis, a significant drop in its income and its historical lows on the stock market threaten to generate new disputes.
The sources consulted by invested indicate that discontent has returned to Amber Capital -majority shareholder with 29% of the group- after confirming the lack of progress made in one of the company’s major projects for this year: the corporate spin-off of Santillana from the group’s media business, which would allow it to make your publishing business profitable.
The separation of the company into two independent companies was perhaps the main agreement of the shareholders meeting June, in which the company’s partners signed a peace agreement and guaranteed that the president Javier Monzon remained in command of Prisa, despite strong pressure from Amber to remove him from office.
Organically separate Santillana from the Prisa group is a historic lawsuit from the fund led by Joseph Oughourian. The objective of this agreement is to activate the creation of two totally independent businesses. This would translate into Prisa creating two companies: Santillana and the media businesses, companies that will only have in common ownership of Prisa as majority shareholder.
The benefits of this financial operation are evident at a time when Prisa is going through a delicate financial situation. Santillana is a company that has practically no debt and that invoices 75% of all the group’s income, a piece of candy for any investor. In the same way, a solo Santillana will find it easier to seek financing, undertake an eventual IPO and agree on agreements with future partners or investors.
But the sources consulted indicate that Virtually no progress has been made on this goal. The justification is that the covid It has paralyzed everything, but really -they say from Amber- we are only talking about an administrative and financial procedure that should not have any brake in the current economic context.
Since Amber they also denounce an evident financial paralysis. A surprising situation is that in mid-October the semi-annual results are still not presented. In Rush They indicate that they are simply exhausting the new deadlines offered by the emergency situation and that they will come out in the next few days.
Similarly, there is also no news of the refinancing. In June, BNP Paribas, HSBC and some backgrounds like CVC promised better conditions for debt refinancing for Rush, which reaches 1,500 million. These entities asked for shareholder peace and stability to refinance with new conditions and accelerated the agreement between all the shareholders to keep Monzón in office.
Prisa must make two partial amortizations and mandatory debt on December 31, 2020 and 2021 for amounts of 15 and 25 million euros, respectively. And you must pay the bulk of the debt in November 2022. In September, a Lazard to launch the refinancing and smooth the spin-offbut there is no news about it either, as indicated by Amber’s environment.
A situation that also prevents progress in the third way proposed by some shareholders. An important group considered before the summer the possibility of carrying out a new capital increase in the company to meet the payment schedule of your bank debt.
Noise of sabers?
The possibility was on the table although, for the moment, there is no unanimity between the factions of the council of Rush. The collapse of the international markets due to the coronavirus and the lack of interested parties to enter the group as industrial investors, and not as speculative funds, stopped any attempt to go further.
A global situation that is not good. The company’s share remains at record lows (it closed on Friday at 0.54 euros), with a rock-bottom stock market valuation of 380 million and a 62% drop so far this year.
A crisis that makes opportunistic funds begin to take positions – the manager Melqart raised its stake to 4.1% – and others listen to offers, such as Telefónica, which is open to selling if a good offer arrives.
In the same way, the income for the first semester will not be good and will reflect a significant setback due to the covid. Likewise, those of the third quarter are not improving as expected.
Before all this panorama Can there be a new saber rattling? The sources consulted indicate that For the moment, it is likely that the blood will not reach the river, but they do not rule out that if the promises made by Monzón in June remain unfulfilled, hostilities could resume as of 2021.