Europcar renegotiates its debt to get through the crisis

Europcar is negotiating with its creditors to “significantly” reduce the level of its debt, which exploded with the health crisis, the group announced on Friday.

Les Echos had indicated on Thursday that some of the lessor’s creditors would be ready to convert a billion euros of debt in exchange for control of 92 to 97% of the capital.

The group’s debt stood at 1.3 billion euros at September 30 (1.4 billion francs), compared to 880 million euros at the end of 2019.

“Following recent market rumors, Europcar Mobility Group confirms that it is currently continuing its discussions with creditors of its corporate debt,” the group said on Friday.

Europcar aims on the one hand to “significantly reduce the level of its corporate debt, to return to the levels of net corporate leverage recorded after the IPO, which would allow it to benefit from more flexibility in an uncertain environment”.

The group also wants “to raise enough funds to finance the + Connect + transformation plan” (a more flexible and connected offer) and “to get through the period of uncertainty linked to the Covid-19 health crisis”.

Europcar recorded losses of 286 million euros in the first half, before limiting them to 9.7 million in the third quarter. The lessor has strengthened its savings plan, which should exceed one billion euros in 2020.

“Taking into account the government measures which are accelerating, between curfews of some and corridors of destinations of others, we no longer know what will be our level of topline (growth potential Editor’s note)”, indicated at the end of October the president of the Europcar Executive Board, Caroline Parot. “Over the year, we know that we will be much lower than in 2019. The fourth quarter of 2020 and the first quarter of 2021 will be very, very low”.

The group sees a “recovery” by 2023 which should allow it to regain its 2019 turnover.

ats, awp, afp

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