ADL Bionatur Solutions (ADL-BS) announced on 12 August 2019 that it has agreed to obtain €25m in debt financing with Kartesia, a private lender, at a rate of Euriobor plus 5% per year with a one-time 7% fee on repayment. Gross proceeds will be used to fully fund the company’s existing capex plans to modernise ADL-BS’s contract manufacturing (CMO) facilities (totalling 2,400m3 in fermentation capacity), to provide the working capital needed to respond to its CMO client demands, and to refinance €5.7m of existing debt. Altogether, ADL-BS expects this debt financing to fully fund the company’s business plan for the next four years, mitigating financing uncertainties and allowing the company to focus on executing its business plan.
ADL Bionatur Solutions |
€25m debt financing to fund current strategy |
Financing update |
Pharma & biotech |
14 August 2019 |
Share price performance
Business description
Analysts
ADL Bionatur Solutions is a research client of Edison Investment Research Limited |
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ADL Bionatur Solutions (ADL-BS) announced on 12 August 2019 that it has agreed to obtain €25m in debt financing with Kartesia, a private lender, at a rate of Euriobor plus 5% per year with a one-time 7% fee on repayment. Gross proceeds will be used to fully fund the company’s existing capex plans to modernise ADL-BS’s contract manufacturing (CMO) facilities (totalling 2,400m3 in fermentation capacity), to provide the working capital needed to respond to its CMO client demands, and to refinance €5.7m of existing debt. Altogether, ADL-BS expects this debt financing to fully fund the company’s business plan for the next four years, mitigating financing uncertainties and allowing the company to focus on executing its business plan.
Year end |
Revenue |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/17 |
12.8 |
(12.7) |
(2.52) |
0.0 |
N/A |
N/A |
12/18 |
25.3 |
(16.3) |
(0.43) |
0.0 |
N/A |
N/A |
12/19e |
60.8 |
1.8 |
0.05 |
0.0 |
42.0 |
N/A |
12/20e |
73.5 |
6.2 |
0.16 |
0.0 |
13.1 |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
ADL-BS has the option of drawing an additional €5m from Kartesia (a second tranche) at similar terms. This option could be exercised if ADL-BS seeks additional flexibility to accelerate its business development or expand its fermentation capacity. Management indicates it will not need to use this additional tranche or raise additional funding if it does not expand its operations beyond its current four-year business plan or if it does not build fermentation capacity beyond the existing 2,400m3 installed base. The company may need to refinance some of its existing debt in the next two to three years, however.
The Kartesia financing agreement compels guarantees from ADL-BS, including a pledge of its subsidiary’s shares and a mortgage on its plant in León, Spain. As such, the arrangement requires ADL-BS shareholder approval, and a vote will be held at a 13 September 2019 shareholder meeting. Until then, we keep our forecasts unchanged. However, we believe this vote process to be a formality as Black Toro Capital, which owns 70% of ADL-BS, supports the financing initiative.
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Research: Industrials
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