Alphavalue Research | The industry is still a question mark: the shift to online purchases, to what extent buyers will need to see, touch and feel a product before making up ones’ mind. However with a 15% upside potential, the sector is nearly at acceptable prices. This is entirely due to Inditex (27% upside) and M&S (25% upside but best avoided). The fact that Zalando or Next do not trade wildly above their target prices may also indicate that a Buy window has opened. Time to dip a toe again.
Telefónica presents its proposal for a Digital Deal in Spain. In line with the 2018 Manifesto, the deal promotes the establishment of game rules adapted to the new post-COVID reality to avoid inequalities in the digital world. Spain’s digital reinvention could have an annual impact of approximately 1.8% of GDP until 2025.
Repsol produced Spain’s first batch of biojet at its Puertollano Industrial Complex, becoming the pioneering company in the manufacturing of this sustainable aviation fuel in Spain. The first batch consists of 7,000 tons of aviation fuel with a bio-component. This will prevent 440 tons of CO2 emissions from being released into the atmosphere, which is equal to 40 Madrid-Barcelona flights.
The New York Stock Exchange acknowledged Santander’s management of the Covid-19 effects on the world economy, particularly the international initiative Santander X Tomorrow Challenge. It is focused on giving innovative solutions to help soften the socioeconomic consequences of the health crisis. As a symbolic act of this recognition, executive chairman, Ana Botín, rang on Monday the virtual bell to mark the end of the Wall Street’s session. The initiative awarded 20 winning projects of entrepreneurs from 10 countries.
A few weeks ago, the government approved a €10 Bn fund to save companies with solvency problems which were particularly affected by Covid-19. The Asturias-based company recorded losses of 9 M in the first quarter to March, after making a €10 M provision due to the uncertainty generated by the coronavirus health crisis.
Spanish telecommunications’ giant Telefonica, together with Italy’s TIM and Mexico’s Claro, have tabled a 2.706 billion euros joint offer for the assets of Brazil’s Oi, the fourth largest telco in Brazil. This bid is 10% over the minimum auction price of 2.5 billion euros required by the company. Telefonica is market leader in Brazil with a share of 33% followed by TIM and Claro, with 24% each.
As reported in its Q1’20 financial results on May 7, IAG had a solid balance sheet and liquidity position prior to the health crisis. It had cash and undrawn credit lines amounting to 10 billion euros as of April 30. So the board’s announcement that it will carry out a 2.75 billion euros capital hike to strengthen its balance sheet (61% market capitalisation) was surprising.
Abengoa’s risk profile was already very high but this has been aggravated to the point where there is no possibility of business continuity due to the situation resulting from the Covid-19. Abengoa and the banks are negotiating against the clock to find a solution that will allow the company to receive 300 million euros before July 31 and avoid bankruptcy proceedings.
The rumor has been confirmed. Cellnex has announced a capital increase of 4 billion euros, 18.5% of its current market cap, which will put into circulation 101.4 million shares, which means 26.3% of the current shares at an issue price of 39.45 euros. The purpose of the capital hike is to finance the group’s expansion via acquisitions. According to the company’s press release, it is looking at assets worth up to 11 billion euros to invest in within the next 18 months.
The state-owned company China Three Gorges could be negotiating the purchase of X-Elio’s photovoltaic assets in Spain. These total 640 MW of installed capacity in operation, under construction or in a developing phase, includes the acquisition of 13 photovoltaic plants. According to sources close to the company, the operation could be worth around 500 M. €, which could include the debt related to these project. The operation could be one of China’s few acquisitions in Europe this year, Bloomberg said.