Ezentis Asks SEPI For An Express Bailout Of 70 Million Euros To Avoid Default, And Its Shares Plunge 20%

Ezentis transformation

Ezentis, formerly Avanzit and Radiotrónica, is once again facing serious financial problems that threaten its viability. The company has asked the Sociedad Estatal de Participaciones Industriales (SEPI) for help on the verge of the end of the public business rescue fund. The energy and telecommunications infrastructure installation company has confirmed to the CNMV that it has requested 70 million euros in public money. The aim is to recover the group’s equity balance and meet the payment of the debt arrears and the important maturities for this month that it has to face.

The CNMV decided to suspend trading in Ezentis shares early in the morning. The shares resumed trading, once the information related to the bailout was published, with a fall of almost 16%. As the minutes passed, they fell further, dropping more than 23% at around midday. Finally, they have fallen by 20.5% and, since the beginning of the year, they have dropped around 45%.

The company acknowledged in its latest financial report the complicated situation it is going through. Ezentis, which lost 144 million euros in 2021, had negative equity of 163 million euros at the end of that year. Under normal conditions, the law would oblige the company to adjust its balance sheet in the first four months of the year to avoid pre-insolvency proceedings. But the bankruptcy moratorium, in force since 2020 and expiring on 30 June, has given the company more time.
In the same financial report, the company also admits that it is dragging behind with its debt, which totalled 157 million euros at the end of the first quarter. At end last year, these defaults amounted to six million euros, of which 1.57 million correspond to interest and another 4.1 million to one of the tranches of its syndicated financing, which expired on 31 January. It had some 15.1 million euros in cash on hand at the end of the first quarter.
The creditors granted a waiver from payment of these amounts and from compliance with the covenants until 30 April. And they are pressing for the company to resolve the situation. Spanish banks are amongstthe main owners of the debt, together with the Muzinich fund. They have hired PwC to intervene in the financing. Deloitte is the company’s advisor.
The company is due to start repaying the principal of its financial debt on 30 June.

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.