The Management Board adopted a decision on the early redemption of debt securities, namely of the Company’s bonds with the symbol 3ATG and the maturity in 2021.

Yesterday, Atlantic Grupa held the Session of the Management Board of the Company, during which the Management Board  adopted a decision on the early redemption of debt securities, namely of the Company’s bonds with the symbol 3ATG (earlier ATGR-O-216A) and the maturity in 2021. Any unredeemed existing bonds shall be cancelled on 17 December 2020.

The company further adds that the investors will be timely informed of any important details relating to the procedure of cancellation of the existing bonds in accordance with applicable regulations and the Issue and Admission Prospectus of the existing bonds dated 7 June 2016.

If the considered issuance of the Company’s new bonds occurs before the aforementioned cancellation of the existing bonds, the holders of the existing bonds would be able to have the existing bonds redeemed by the company as the issuer, i.e. exchange them for new bonds.

As a reminder, Atlantic Grupa recently stated that the company is considering the issuance of new bonds. In their statement the company did not specify on how much the new issuance might be, but they did note that more information will be released in case the transaction is executed.

As we previously stated, it is not hard to imagine that the new issuance will be used to refinance the company’s HRK 200m bond which will be redeemed early. The bond was issued back in June 2016 at 3.135% yield with an annual coupon of 3.125% and a semi-annual payment of interest. This would translate to an annual interest expense of HRK 6.4m. At issuance synthetic government yield was 2.635% and bond was issued with 50 bps spread. Considering the current low interest environment it wouldn’t surprise us if Atlantic was able to reach an even lower rate this time, especially when considering that the company is currently operating on the lowest level of indebtedness since the acquisition of Droga Kolinska.

One should also add that Atlantic Grupa would certainly be able to pay off the maturing bond with cash held on the balance sheet, but it seems as the company does not want to significantly lower their cash position at the moment.

This could imply that the company is looking to collect funds in case any interesting target comes along as it is always looking to increases its growth via acquisition. Also, the company might be looking to improve its capital structure by increasing debt.

Currently, Atlantic Grupa holds a net debt of HRK 756m, which translates to a net debt/EBITDA of 1.1x. Please refer to the chart below to see Atlantic Grupa’s net debt development since 2015.

Atlantic Grupa Historic Net Debt (HRK 000) & Net Debt/EBITDA

The main index of Ljubljana Stock Exchange ended yesterday’s trading session down by 1.8%, as almost all of its constituents ended the day in red.

Such a performance of the index could arguably be attributed to a continued high number of cases in Slovenia, which has in the recent day’s spiked to four-digit figures.

In order to prevent the spread of the virus, the Slovenian Government has imposed much harsher restrictions than the one currently in place in Croatia. To be specific, for the first time since WW2, a restriction on movement at night was introduced, meaning that Slovenian’s are not allowed to leave their homes from 9 pm until 6 am (with some exceptions). As a result of the imposed restrictions, many shops are closed, while the operation of hairdressing and beauty salons, wellness centres, swimming pools, cinemas, theatres and gyms is prohibited. In addition, starting today, passing from one province to another is prohibited (unless given an acceptable reason).

All of the above mentioned led the negative sentiment on the market, with Triglav witnessing the highest decrease of 3.23%. Next comes Krka, whose share price decreased by 2.47%, while the share closed at EUR 79 per share. Note that this is the first time since late May of this year that the share is traded below the EUR 80 per share. At the current share price, the company is traded at a P/E of 9.4 and EV/EBITDA of 4.8.

Next comes Petrol (-1.95%), whose share price has sharpy increased in September on the back of the news on liberalization of retail fuel prices, which you can read about here. Following the news, the share price increased to as much as EUR 337 per share in early October. However, the share price has since than fully reverted and is now trading at EUR 302 per share.

Share Price Performance of SBITOP Constituents on 26 Oct 2020

The Management Board of Petrol published the findings issued by BDO Revizija, after carrying out the special audit of transactions of the company,. The review consisted of 30 transactions concluded with a value exceeding EUR 1m in the period of 1 January 2015 to 24 October 2019.

Petrol published an announcement on the LJSE stating that the four-year terms of office of five Supervisory Board members will begin on 11 April 2021, with the four-year term of office of one Supervisory Board member beginning on 17 July 2021. The Supervisory Board of Petrol invited all interested candidates to submit their applications.

Besides that, Petrol published the Management Board of Petrol published the findings issued by BDO Revizija, after carrying out the special audit of transactions of the company, pursuant to Resolution 3 of the General Meeting of 12 December 2019. The mentioned review consisted of 30 transactions concluded with a value exceeding EUR 1m in the period of 1 January 2015 to 24 October 2019. Out of those, in most transactions no deficiencies were found with respect to the diligence of a conscientious and honest business which could lead to the liability of the management board. However, BDO Revizija pointed out on 8 transactions, where deficiencies were found. Of those, the largest transaction was the purchase of shares and increase of capital in MBILLS which amounted to EUR 11.04m. During the review, BDO Revizija discovered significant deficiencies, which in their opinion represent the basis for liability for damages of members of the Management Board.

You can find the full 28 page report on link here.