10 Sep 20

Europcar launches debt restructuring talks

Europcar Mobility Group (EMG) has started talks to restructure its debt. It points to COVID-19 as the cause of falling revenue in the first half of this year, and thus of its current financial squeeze. 

  • EMG’s revenue for H1 2020 was down 43% versus the same period previous year, to €815 million. The result for the second quarter alone was even more dramatic, with revenue down 69% compared to Q2 2019. 
  • As a consequence, earnings before tax (EBITDA) for H1 2020 were -€209 million, compared to €82 million for H1 2019. At mid-year, corporate net debt stood at €1.25 billion. 

Considering that COVID-19 remains present throughout the world and the timing of the economic recovery remains uncertain, EMG is now in talks with its creditors to achieve a capital structure adapted to its current – lower – level of revenue. That means reducing corporate debt and achieving an appropriate level of liquidity. 

To facilitate these talks, EMG wants its main subsidiaries to be able to appoint a mandataire ad hoc and/or a conciliateur (i.e. external administrators). For this, the company will request the approval from its creditors.

EMG continues to look to the future and intends to accelerate its ‘Connect 2021-2023’ transformation plan. Its aim is to redesign EMG’s offers and services around new customer needs and expectations, i.e. a rising demand for contactless, fully-digital and sustainable mobility solutions. 

The Group is convinced that it is taking the right steps to benefit fully from the rebound of the travel and leisure industry – when it comes. EMG is receiving financial advice from Rothschild & Co and legal advice from Darrois Villey Maillot Brochier, Gide Loyrette Nouel and Kirkland & Ellis. 
Listed on the Euronext stock exchange in Paris, EMG’s major brands include Europcar, the leader in car and LCV rental across Europe; Goldcar, a Europe-wide low-cost car rental specialist; and Ubeeqo, a European leader in round-trip carsharing (both B2B and B2C).

(Image: Shutterstock)

Authored by: Frank Jacobs