Europlasma could not bring to fruition plans to recapitalise/dispose assets. It filed for the French equivalent of Chapter 11 which opens a 6-month process. Trading should resume on 29/01/2019.

Difficult markets by Q4 18 put paid to Europlasma’s plans to launch a rights issue and then to finalise the possibility of a partial disposal. Bond holders (€5m), due to be repaid by the close of 2018, effectively pulled the plug. On 22/01 Europlasma stopped paying its debtors with the agreement of the Court. This was made public on 25/01 at the close.

“Cessation de paiements” means that the group and its subsidiaries have to go through a redressement judiciaire (some sort of a Chapter 11) whereby debt payments are pushed back so that the firm can operate if it is found to be cash generative.

Courts decide about the hierarchy amongst stakeholders. Staff comes first as a rule and tend to bite disproportionately. Obviously, shareholders are left with little say. From the point of view of the latter, it all amounts to a bet on Europlasma’s net asset value. On the pre Chapter 11 metrics, this was estimated at €0.23.

The above quote was for a running concern. Asset buyers will try and impose their terms and the longer the wait the more likely it is that key staff will leave.

AlphaValue will keep an eye on developments over the next three months and comment. This is most likely to include trimming the net asset value.