Original-Research: DEMIRE AG (von NuWays AG): Buy

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Original-Research: DEMIRE AG - from NuWays AG

12.11.2024 / 09:01 CET/CEST

Dissemination of a Research, transmitted by EQS News - a service of EQS

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Classification of NuWays AG to DEMIRE AG

Company Name: DEMIRE AG

ISIN: DE000A0XFSF0

Reason for the research: Update

Recommendation: Buy

from: 12.11.2024

Target price: EUR 1.50

Target price on sight of: 12 months

Last rating change:

Analyst: Philipp Sennewald

Refinancing finalized - Full focus on operations

Yesterday, DMRE announced that the company had successfully the terms and

maturity of its corporate bond in a procedure under the German Bond Act.

This comes after in the beginning of September, bondholders representing

more than 90% of the aggregate outstanding principal amount of the bond

agreed to the amendment and extension of the bond. The technical

implementation has now taken place and the bond under the new conditions is

already tradeable again on the Luxembourg Stock Exchange.

As agreed upon, DMRE repaid EUR 49.9m (10% of outstanding amount) at par on

22nd October. Further, the company repaid EUR 4.6m below par as part of a

tender offer process. In addition to this, EUR 190.8 were also repurchased

below par (76.25%) and cancelled following the communicated backstop

agreement. On top of this, management aims to repurchase a further amount of

EUR 1.3m on the basis of the backstop agreement soon.

With this, DMRE already redeemed EUR 245.3m, reducing the outstanding volume

to EUR 254m. In the process, the company made use of a shareholder loan by

Apollo to the tune of EUR 92.9m. Mind you, the maturity of the bond was

extended to 2027 at an increased interest rate of 5%. Yet, management is

incentivized to reduce the volume further going forward, given penalty fees

of 3% if the bond is not reduced by another EUR 50m until YE '25 as well as 2%

if it has not been reduced by EUR 50m until YE '26. Moreover, a PIK interest

of 3% will kick in starting FY '27. On this basis, we expect DMRE to dispose

further assets in order to shore up liquidity. Management is confident to

close 3 deals until YE '24 und dispose overall EUR 50m until FY '25e.

Besides this, the company received positive news regarding the rating of its

bond, which Moody's upgraded to Caa2 while changing the outlook to stable.

The stock remains undervalued given the significant and, in our view,

unjustified NAV discount of 73%.

Hence, we reiterate BUY with an unchanged PT of EUR 1.50 based on NAV.

+++ For further information on the company's strategy following the

refinancing, there will be a roundtable

discussion with CFO Tim Brückner on Wednesday at 11:00 a.m. ( LINK) +++

You can download the research here: http://www.more-ir.de/d/31279.pdf

For additional information visit our website: www.nuways-ag.com/research

Contact for questions:

NuWays AG - Equity Research

Web: www.nuways-ag.com

Email: research@nuways-ag.com

LinkedIn: https://www.linkedin.com/company/nuwaysag

Adresse: Mittelweg 16-17, 20148 Hamburg, Germany

++++++++++

Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss

bestimmter Börsengeschäfte.

Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben

analysierten Unternehmen befinden sich in der vollständigen Analyse.

++++++++++

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2027521 12.11.2024 CET/CEST

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