20 August 2015 by pdonnat
SELNSW (Selecta Group BV) is the European leader in public vending machines. Waiting for a train or at your office, you have likely used one of its 145,600 machines in Europe. The company was created in Switzerland in the late 1950s and was taken private by Allianz Capital Partners in a LBO in 2007, one of the last LBO before the GFC. The company reported its earning today and on the attached Grapple you can see how the credit market is actually trading on the fear. Ahead of the quarterly results, the 5Y CDS widened by 100bps to trade 11% upfront plus 5% running (850bps running). With revenues better that expected, the CDS came back by 100bps today. The company is still facing large challenges with a net debt of 866MEuros for 122MEuros of EBIDTA. The business is a low margin business using a lot of CAPEX to invest in new machines. The company has little financial flexibility and Selecta can not yet refinance its debt on viable terms.