Tuesday 04 April 2017 by FIIG Research Company updates

Company updates – Emeco, Novacare and RWH Finance

In this week’s company updates, Emeco completes its recapitalisation and mergers, we provide a factsheet for Novacare’s April 2033 bond and RWH Finance’s refinancing process has started


On 31 March 2017, Emeco announced it successfully completed the recapitalisation and mergers with Orionstone and Andy’s Earthmovers.

Key points:

  • Emeco’s noteholders, Orionstone creditors and Andy creditors exchanged a total of A$586m in claims for:
    • New 2022 senior secured notes totalling A$465m, and
    • Approximately 967 million Emeco shares, representing 44% of Emeco’s issued capital
  • Its merger with Orionstone involved an exchange of 100% of Orionstone shares for 214 million Emeco shares, representing 10% of Emeco’s issued capital
  • Its merger with Andy’s involved an exchange of 100% of Andy’s shares for 106 million Emeco shares, representing 5% of Emeco’s issued capital
  • Approximately 124 million Emeco shares have been issued to Black Diamond, representing 6% of Emeco’s issued capital
  • Following completion, Emeco will have FY16 pro forma adjusted EBITDA of A$110m – including annual forecasts of A$15m pa – and an enhanced capital structure

According to an ASX release, the recapitalisation and mergers will significantly deleverage Emeco, with the company’s new senior secured notes and new revolving credit facility (maturing in March 2020) allowing it to continue reducing debt.

Further, global ratings agency S&P have announced the downgrade of Emeco and its 2019 senior secured notes. The revised rating of Emeco and its 2019 notes is reflective of the recapitalisation and merger completion. Under S&P definitions, the recapitalisation represents a “distressed exchange” – whereby Emeco’s 2019 noteholders will receive new senior secured notes and Emeco shares in place of the face value originally issued.

S&P will review Emeco’s rating and issue ratings for its new senior secured notes over the coming week.

More information can be found in the ASX announcements hereExternal link - opens in a new window and hereExternal link - opens in a new window.

Novacare Solutions Partnership (Novacare)

The Novacare Solutions Partnership (Novacare) consists of Novacare Solutions Trust and Novacare Health Solutions Trust. Novacare, together with Novacare Services, contracted with the NSW Department of Health (NSW Health) to design, build, refurbish and maintain various facilities at the Newcastle Mater Misericordiae Hospital (Mater Hospital) in Newcastle under a Public Private Partnership (PPP) arrangement. 

We have provided a factsheet for Novacare's April 2033 bond, which is available here.External link - opens in a new window

RWH Finance (RWH)

On 29 March 2017, RWH Finance’s sponsor, BBGI SICAV S.A., announced that the refinancing process for RWH’s March 2021 nominal bonds had commenced. It is expected to conclude during 1H17.

More information can be found here.*

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