Rush has reversed its initial strategy of dividing its business, Education and Media, in two and selling Santillana’s international division to reduce debt. Now, the company’s new plans are to focus on the refinancing of the bulging debt that still registers, 734 million euros at the end of the third quarter, which keeps the business drowned, as the president of the company publicly acknowledged a few days ago, Joseph Oughourlian, responsible for the Amber fund, first shareholder with 29.8% of the capital.
With a debt of 734 million, an ebitda in the first nine months of the year of 18 million, losses of 82 million and a market capitalization of less than 400 million, the leadership of the company has now ruled out selling more assets – only Santillana Internacional remains after parting ways with Santillana España and Media Capital- and analyzes formulas to improve its financial position and have room to manage the company.
According to sources in the sector, among the options that the company manages is to carry out a capital increase so that Vivendi can increase its participation in Prisa to 29.9% of the capital and receive funds that allow it to reduce debt or the improvement of the cash position of the company.
«It is the only thing that gives the company the possibility to reduce debt. And that would prevent Vivendi from having to buy those shares on the market -which would not enter anything in a hurry-, and it would avoid having to negotiate with the current shareholders a possible sale of its participation, “say the sources consulted.
“The only thing that Prisa does win is shareholder stability with the creditor banks to negotiate a refinancing to alleviate the current situation, which is the true objective of the company now. But with the pact between Amber, Vivendi and Telefónica there is already a peace ”, these sources explain. The capital, in addition to the minority, is completed by the heirs of the founder, Jesus Polanco, which have a 7.61% stake through the company Rucandio, the Mexicans Carlos Slim (which owns 4.3%), Carlos Fernandez (4.03%) and Roberto Alcantara (5.02%), the Qatari Al Thani (5,14%), Santander (4.1%) and Caixabank (1,5%).
In addition, it would be difficult for the current shareholders of Prisa to want to go to a capital increase, taking into account that the company’s stock does not take off and they accumulate losses. At this time the titles have already lost the Vivendi effect and they are again at minimum.
Application
At the end of October, Vivendi asked the government to raise its stake in Prisa from the current 10% to 29.9%, a legal limit that would force it to launch a takeover bid for 100% of the company. The French conglomerate came to Prisa from the hand precisely of Amber Capital, its partner in France, and with the support also of Telefónica -9% of the capital-.
The government of Pedro Sanchez, which has been seen with the leadership of Vivendi, it is difficult not to allow a European company like Vivendi to reach that 29.9% of Prisa, even if it is a strategic sector. It recently gave the green light to a partial takeover bid for Naturgy from an Australian fund.
The normal thing is that Vivendi has a green light with some condition, such as maintaining the company’s headquarters in Spain. In addition, this newspaper has published that the Government will force it to respect the current ideological line of the main Prisa media, The country and the Cadena SER.
