SAPEC SA is up 400% over the last year, yet remains an attractive special situation.
SAPEC is a somewhat strange company. Although listed in Belgium, business activities are almost exclusively in the Iberian Peninsula (Portugal & Spain). This is how the company describes itself:
Established in 1926 as a mining and chemical company, Sapec expanded into various industrial and service sectors becoming an industrial holding group controlling and managing various businesses.
The 2015 annual report shows a complicated trading environment. Sales have declined 5 years in a row and the company made losses for the last 3 years.
The turning point came when the company announced the sale of its main business for 456m EUR of EV, which will result in around 230 EUR net cash per share (tax-free) compared to a share price of 160 EUR.
The company has indicated that 150 EUR per share will be distributed to shareholders in the short term, so you get "everything else" for 10 EUR per share.
"Everything else" may not be worth much, plus it includes a potential 36 EUR liability. However, within the remaining assets there seems to be a potentially quite valuable wind farm business and of course the other (non-distributed) 80 EUR per share from the sale, so this really looks like a bargain with a very short term catalyst (the cash distribution).
In summary:
SAPEC net debt as of 06/2016: 162,5M (according to the statement 137,6 M in AB)
Cash to receive + debt assumed from AB: 456M
SAPEC after closure:
Net cash: 293,5M
Industrial chemicals (2015 EBITDA: 1,059 k€)
Environment 2015 EBITDA: -29k€ (they are planning the sale, negotiations were underway for a management buyout)
Agro commodities distribution (2015 EBITDA: 969K€)
Logistics (2015 EBITDA: 1389 k€)
Assets held for sale: liquid bulk terminal in Cadiz (at the books for net 7M)
Real estate:
- 100 hectares of the industrial park in Setubal (www.blueatlantic.pt)
- 100 hectares for tourism in Lousal
Other positions: ENERGIA LIMPIA INV., THARSIS AND NATURENER: they explain extensively in the annual report (note 14 a pages 70-72). SAPEC guarantees 36M of debt to a bank, so in the worst case they lose 36M
To be conservative I would argue that all these assets are at worst canceled by the 36M guarantee, but they are probably worth a few millions more, at least.
