Europcar Pulls Earnings Forecast Amid Resurgent Virus in Europe
(Bloomberg) -- New restrictions imposed across Europe to curb the spread of Covid-19 forced Europcar Mobility Group to withdraw its earnings guidance for the remainder of this year, with the firm anticipating a return to pre-virus trading only by 2023.
The French car rental group pulled its prediction for the 2020 financial year “due to the uncertainties derived from the second wave” of the virus, it said in a statement on Monday as it presented its third quarter results.
Europcar’s business is heavily dependent on international travel, which was brought to a halt by the pandemic and remains sluggish. The company is now focusing on saving cash and negotiating a reduction of its 1.3 billion euros ($1.6 billion) of net corporate debt with creditors and shareholders.
The company managed to keep losses at less than 10 million euros in the third quarter, but the situation has deteriorated since mid-September, with “extremely reduced visibility,” said Caroline Parot, Europcar’s chief executive officer, in a call with reporters. Before the pandemic struck, the group’s algorithms could predict bookings a few weeks ahead but now visibility is down to just a few days, she said.
Revenues for the third quarter were 50% lower compared with the previous year.
Europcar’s restructuring negotiations with creditors will include a debt cut and new funds to help it buttress the balance sheet amid the crisis, it said on Monday.
Europcar Creditors Seek Debt-for-Stock Swap in Restructuring
Europcar will also delay the payment of a combined 21 million euros of bond interest due on Oct. 30 and Nov. 16, it said.
Investors including Anchorage Capital Group, Attestor Limited, Diameter Capital Partners and Marathon Asset Management are in talks with the company, people familiar with the matter said earlier this month.
Shares fell as much as 8.4% on Monday, to the lowest in almost a month. Bonds due 2024 gained 3 cents on the euro to 46 cents, according to data compiled by Bloomberg.
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