Santander, CaixaBank, Sabadell, Bankia, Popular, Crédit Agricole, Société Générale and Royal Bank of Scotland came to the rescue of OHL a year and a half ago, when they refinanced 747 million euros. The group led by José Antonio Fernández Gallar canceled its bank liabilities last April, after selling its concessions subsidiary to the IFM infrastructure fund for 1,991 million euros.
OHL's liquidity at the end of September was 1,046 million, although it has debt listed on three bond issues with maturities in 2020, 2022 and 2023 for 666 million euros. The problem is that OHL needs guarantees to present itself to more projects, and right now that funding formula is closed. The guarantees used by the construction group amount to around 900 million, according to Bloomberg, essentially granted by the aforementioned banks.
Financial sources point out that one of the solutions that are shuffling between the entities to improve the profile of the company is that it launches an offer to repurchase its listed debt. This intensified its collapse from November 15 after posting losses of 1,336 million between January and September, and now stands between 61% and 82% of the nominal. You could only use part of the cash, because before you must calculate the money you need to continue with your operations. Now OHL does not generate cash with its business but consumes it: 582 million in gross terms in the three quarters of 2018.
The sources consulted indicate that this is one of the company's options to improve its financial risk profile and get the rating agencies to return confidence to the company. This would open the door for them to improve their rating, downgraded one step by Moody's last November 16 to Caa1, a speculative grade with high risk and seven levels below the desired level of investment. Fitch is more optimistic and places its rating at B +, three levels higher than Moody's. With an improvement in the ratings of the agencies, the risk committees of the financial institutions would agree to grant more guarantees, the raw material with which OHL works to present themselves to new projects.
A spokeswoman for the company says that at this moment there is no offer to buy back bonds and that banks have not requested this measure. In the presentation to analysts of the accounts to September, after being asked about this question, José María Sagardoy, financial director of OHL, did not close the door to an operation of this type: "Once we have a clear picture, we will decide the structure of capital ".
The result of the eventual repurchase operation, which also has detractors among a portion of the reference banks of OHL because it would reduce its hard cash, would be double. In the first place, the difference between the nominal value of the debt and the purchase price would be recorded as benefits. A bond with a nominal value of 100 euros that is recompresed at 85 would imply about 15 euros of extraordinary result. The second effect would be a reduction in financial interests, which totaled 64 million in the first nine months of the year.