Exane cuts Clariane as higher funding costs might weigh on debt reduction

Clariane SE

17/11/2023 12:46

** Exane BNP Paribas cuts French care home operator Clariane
 CLARI.PA  to "neutral" from "outperform" citing risk of higher
funding costs that could weigh on deleveraging 
    ** The firm hiked last month its FY financial leverage
target to around 3.8X from 3.5x it had seen earlier
    ** It unveiled this week a plan to divest assets worth
around 1 billion euros next year as part of a 1.5 billion euro
plan to "restore its access to financing" from 2024, which also
includes a 300 million euro capital increase
    ** While debt repayments for next year look manageable,
funding costs risk spiralling, notably if the UK hybrid bond
(GBP 200 million) is not refinanced or is refinanced on less
favourable terms, the broker notes
    ** It adds that smooth execution of divestments is essential
to restore confidence, but the market is crowded with assets for
sale, as rival Orpea  ORP.PA , which in July won court approval
for an accelerated safeguard plan to restructure its debt, is
trying to dispose of 2 billion euros
     ** Among the eight brokers covering the stock, two rate it
"strong buy" or "buy", five rate it "hold" and one "strong sell"
    
   

 (Reporting by Diana Mandiá)
 ((diana.mandiaalvarez@thomsonreuters.com))