Daily analyst comments
Wimm-Bill-Dann to secure RUB 3.7 billion loan from VTB
20.01.09 10:38
Wimm-Bill-Dann (WBD) is to take a RUB 3.7 billion loan from VTB. We are upbeat about this news: the company plans to direct the funds towards replenishing its floating capital and, possibly, financing a buyback of its bond issue in 1Q 2009.
On January 16, an EGM of WBD shareholders approved taking a RUB 3.2 billion loan for one year, and a RUB 500 million overdraft for 180 days.
We are upbeat about the company’s decision to raise funds to replenish its working capital and possibly refinance its short-term debts. Any risk that the company could be insufficiently liquid is mitigated by its sound leverage, as shown by a net debt/EBITDA multiple of 1.5, and more than USD 137 million in cash assets on its books.
According to the management, the funds raised will go to replenish the company’s floating capital and, possibly, buy out its bond issue. The respective offer may be made in 1Q 2009.
We estimate the target price of WBD at USD 34.6 per share, which implies an upside potential of more than 194% to the current stock valuations.