Industrials: Ecopro BM Co Ltd, Atlantia SpA, VRL Logistics Ltd, Sukhbir Agro Energy Limited (SAEL) and more

• Ecopro BM announced a ₩0.5T rights offer: 1.6M new ordinary shares at a preliminary offering price of ₩310,300. In addition, there will also be a 1-to-3 bonus share issuance.
• In outright Long trading aiming for a 20% discount, one thing to keep in mind is bonus issues. Post-bonus issue price correction will likely be more substantial this time.
• We should aim at outright shorting as moving into the bonus issue ex-rights date while watching Ecopro’s share price upward trend and volatility during this event.

• GIP/Brookfield/ACS weigh launching a €15 billion unsolicited offer for Atlantia. Blackstone may partner with the Benettons to acquire Atlantia at €24/share (26% premium ). Italian Government’s role will be key.
• Atlantia trades at higher multiples than ACS (EV/22e EBITDA: 12.8x vs 3.2x, Capital IQ consensus). A hypothetical ACS/Abertis would become a world leader in infrastructure, but leverage is key. 
• The opposition of Edizione makes the operation difficult/more expensive. A joint-bid Edizione/Blackstone, would force the GIP-led group to present an improved offer. Nearly 50% of Atlantia’s NAV is cash.

• VRL Logistics (VRLL) announced a capex plan of INR5.6b to purchase 1,600 trucks (~25,000t carrying capacity) spread over the next 12-18 months.
• This capex is essential to: a) replace its older fleet that moves out due to the vehicle scraping policy and b) capture the pick-up in demand in the LTL segment.
• We believe VRLL would be very well placed to capitalize on the growth opportunity after this capacity addition.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

SAEL Limited is roadshowing a USD 7NC4 green notes offering, with the proceeds to be used for refinancing all existing debt and capex of the restricted group (RG). The integrated player has three business lines: Renewable Energy, Warehousing Infrastructure, and Agri-processing & Solvent Extraction. 

We view SAEL as “Medium Risk” on our LARA scale. We note favourably the utility nature of the business, with contractual and visible revenue and cash flows for the RG that will hold SAEL’s renewable power plants (solar and waste-to-energy). Conversely, the credit is weighed down by the: [1] RG’s small scale and short track record of the associated assets (less than three years); [2] weak corporate governance, especially the private ownership; and [3] execution risk for the proposed organisational restructuring.

Our Credit Bias is “Stable”, given the revenue visibility and contractual cash flows under PPAs.

We expect the proposed notes to price at 7%.