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OT Logistics: Dividend possible as early as 2022 thanks to restructuring
Author:Mariusz Dasiewicz
The OT Logistics Group achieved positive restructuring effects, which allowed for, among others, the separate repayment of PLN 14.7 million of liabilities to the bondholders of the series D, while resolving "practically all relevant legal disputes", informed President Konrad Hernik. The Management Board assumes that the level of the group's interest debt by the end of this year should decrease – depending on the scale of the divestment – to a level between less than 1x EBITDA and 2x EBITDA. He also estimates that the payment of the first dividend after a long period of interruption will be possible in 2022.
"We consider this [D series payment] to be a landmark event, showing the highly positive impact of restructuring effects and solutions to key legal problems, on the level of the generated cash flow. The current cash flow allowing a significant accumulation of funds from the OTL Group's operations was further supported by the recovery of a total of over PLN 9 million, among others: as a result of the long-term legal dispute with the PKP Group's companies, culminated in OTL's taking over 100% control of RTC, as well as reaching an agreement on disputed settlements between the OTL and other trading partners" - wrote Hernik in a comment on the results for Q1.
To date, the OTL Group has solved virtually all relevant legal disputes by recovering frozen funds. On key issues, the settlement of commitments to Allianz AZ in Croatia remains. The Management Board of the OTL assumes that if the expected settlement formula for these commitments is developed, and if the planned further de-investment activities are fully implemented, the level of OTL Group interest debt by the end of 2021 should fall below 1x the EBITDA expected to be achieved for 2021. Even if only part of the planned divestments were implemented, interest debt should not exceed 2x the annual EBITDA, the President stressed.
"Achieving these parameters will mean restoring the OTL Group’s healthy and stable financial position and returning to full 'bankability'. In this regard, the total repayment of the current interest debt from the funds from the divestment is expected, with the possible support of the refinancing measures with new loans, if the level of the funds from the divestment proves insufficient" - we also read in the comment.
The Management Board also assumes that by mid-year the OTL will reach a positive equity value at unit level. The financial results achieved and planned from operational activities and the real plans for a significant reduction of interest debt show good prospects for the potential market value increase of the OTL Group, he emphasised.
"The strategic priority for the management of the OTL remains the drive for the OTL to achieve a stable position of the dividend company. In the event of the expected further progress of the activities, i.e. maintaining stable operating results and a significant reduction in interest debt, the OTL board assumes that the payment of the first dividend after a long period of interruption will be possible in 2022" - concluded the President.
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