(News Bulletin 247) – The action of the private operator of retirement homes soared on the Paris Stock Exchange after the publication of two reports by an independent consulting firm.

Orpea once again confirms its status as a highly volatile stock. The title of the operator of retirement homes, takes the lead of the SBF 120, thanks to a rebound of 36% to 2.75 euros, around 10:45 am. The action had not been so sought after by investors since February 10, 2023 (+50%).

This new outbreak of the title is to be credited to the publication Friday evening after the stock market, of two expert reports on the valuation of Orpea. These two documents were produced by the Ledouble firm, which acted as an independent financial expert with a view to implementing the financial restructuring of the group of retirement homes.

The first report, which concerned the valuation of the Orpea group as a going concern, led the independent expert to favor a range of values ​​between 6 billion and 7 billion euros.

The second document related to the valuation of Orpea in liquidation, including a scenario for the sale of assets (sale of assets) taken in isolation and a scenario for the sale of all of the group’s assets to a buyer. In this hypothesis adopted by the independent expert of the Ledouble firm, the best estimate of the net asset value was thus between 2.6 billion euros and 3.7 billion euros.

Currently, the capitalization of the group only weighs around 160 million euros, after having lost more than 97% of its value since January 2022 and the publication of the book-investigation Les Fossoyeurs, the start of a real stock market ordeal for the Company.

Following this communication and the stock market reaction to the stock, Orpea published a new press release around 3:45 p.m. to provide details on these assessments.

“The figures indicated in the company’s press release published on Friday evening are not equity valuations but valuations of the activities (“Eentreprise values”) of one part of the Orpea group as a going concern, and on the other hand of the company Orpea in liquidation, as described in each of the two reports”, explains the company.

The latter invites in particular to consider the going concern valuation (therefore the 6 billion to 7 billion euros) with regard to the value of the debt at the end of December 2022, of 9.7 billion euros, and which implies a negative equity value.

“In each of these scenarios (in a going concern situation and in net asset value, editor’s note), consequently, the current economic value of equity is negative”, underlines the operator of retirement homes.

A questionable restructuring

Orpea is currently crumbling under a net debt of just under 8.8 billion euros. And the financial restructuring project provides for the cancellation of just under 4 billion euros in debt and the takeover of the group by a group of shareholders led by the Caisse des dépôts (CDC).

This restructuring will be done to the detriment of the current shareholders and should result in a gargantuan dilution of 99.6% or even 99.96% under certain conditions. Moreover, several elected officials have questioned and worried about the treatment of holders of Orpea securities.

The general manager of the Caisse des dépôts, Eric Lombard, and the chairman of its supervisory committee, Alexandre Holroyd, were heard in mid-June by the deputies on the recapitalization of the group. The management of Orpea, she considers that only the project with the CDC allows the continuity of operation of the company.