Thursday, September 28, 2023

Latham & Watkins steers PRISA´s refinancing

Latham & Watkins has advised Grupo PRISA on its refinancing agreement, as the group´s Board of Directors approved the 2021 results


PRISA has reached a refinancing agreement that is set to enable the Group to focus on business development. The outline deal endows the Group with financial stability in the medium term, extends debt maturity, improves flexibility and links financial strategy to Environmental, Social, and Governance (ESG) criteria. Crucially, for the first time, the deal enjoys the full support of creditors who are committed to the Group’s growth plan.

This outline deal comes as the Board of Directors approved the results for 2021 which, despite a turbulent start to the year due to the impact of the pandemic, show a clear recovery across all business lines, with a robust rebound for advertising, digital businesses and education in Latin America, as this latter market returns to normality.

For the year as a whole, the Group posted an EBITDA of €107 million, excluding severance payouts, 46.2% more than the previous year, and exceeding the forecasts set at the beginning of the year (of between €95 and €100 million).

Revenue reached €741 million, which represents an increase of 5.8% compared to the previous year. The Education division closed the year with revenues of €358.8 million, 1.9% less than in 2020 due to the impact of a first quarter with activity practically at a standstill and despite the strong recovery seen in the second half of the year. PRISA Media recorded revenue of €383 million (+14.1%) driven by the recovery of advertising and digital growth. PRISA’s ongoing commitment in this area is reflected in the increase in digital revenues, which increased their contribution by 8.3% to account for 30% of the total.

The net result shows losses of €90.5 million compared to the losses of €121.9 a year earlier. Improvements in operations and in the financial result, due to lower debt, were negatively offset by the higher severance payouts over the course of 2021. Net accounting profit is negative compared to that registered in 2020, the year in which the net result showed a positive balance of 89.7 million euros due to capital gains from the sale of Santillana Spain.

According to Joseph Oughourlian, chairperson of PRISA: “After a very complex start to the year, we have closed the year with clear signs of recovery in all our businesses, a trend that we expect to continue in the coming months. The thorough reorganisation undertaken by the Group during 2021, the commitment to strengthening corporate governance, the determined drive to digital transformation and the new culture of financial management give us grounds for optimism as we look ahead to the future”. Oughourlian concludes that “though we would be wise to be wary of the economic situation and the risks involved, it is clearly now time to look to the future focused on our roadmap and the growth plan that we have embarked upon.”

Latham & Watkins advised PRISA with a team led by Finance department and Restructuring and Special Situations practice partner Pedro de Rojas. Pedro advises multinationals, investors and financial institutions on all types of financial transactions, with an unrivalled track record in complex restructurings. He has advised PRISA on all aspects related to its financial debt over the last ten years, prior to his incorporation to Latham & Watkins from Linklaters.

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