Two investors opposed to debt plan call for Orpea shareholder meeting

Business

Two shareholders that together own more than 5% of France’s Orpea (ORP.PA) have called for a shareholder meeting at the beleaguered care homes group as they try to rally opposition to its planned debt restructuring plan.

“An unprecedented shareholder ruin is now emerging”, family-owned Mat Immo Beaune and investment group Nextstone said in a letter sent to Orpea on Tuesday and reviewed by Reuters.

Orpea said in June an independent audit had found evidence of financial wrongdoing, and in October warned of asset impairments and said it had requested talks with creditors.

It declined to comment on Wednesday.

Mat Immo Beaune and Nextstone said in October a plan to convert 4.3 billion euros ($4.3 billion) worth of debt into equity was premature and could lead to Orpea falling in the hands of speculative foreign funds.

In Tuesday’s letter, they also called on France’s AMF market regulator to look into the “abnormal” share performance before and after Orpea’s October announcement.

“In a context where the share price was relatively stable, it experienced a sudden surge, followed by a vertiginous fall of more than 55% in a few days, as a direct consequence of the company’s new press release, i.e. several hundred million euros of value destruction”, the two shareholders said.

AMF said it did not comment on individual cases.

“This letter raised concerns about the company’s financial profile,” AlphaValue analyst Yi Zhong said.

French media outlet l’Agefi on Monday reported ESG-driven fund Mirova had sold its 4% stake in Orpea.

“It has nothing to do with the action of the two new shareholders, (…), it is purely a reaction to a blurring of the financial visibility of the company,” Mirova’s press service said.

Shares in Orpea, which have lost 90% of their value this year, were down 2% at around 1100 GMT.