FY 19 consolidated accounts demonstrated an increasing risk level. On the other hand, FY 19 annual report didn’t mentioned the FPN’s warrants supposedly neutralised in H1 20.
Fiscal claims
One could have hoped that the French fiscal administration would have accepted a deal regarding the accrued amount of c. €10m of unpaid historical property taxes.
A long legal procedure started early 2020. In the absence of revenue (occupancy being nul), risk level rises as the annual amount of property taxes was €1.2m in FY 19 vs. the current €3m of FPN’s market cap. Property taxes could progressively consume FPN’s plot residual value, should both trial and disposal take time.
We still consider FPN’s victory as a pure free option.
FIPP’s investment structure
FIPP, FPN’s reference shareholder (groupe Duménil) converted its €13m shareholder’s loan in Pamier SARL shares in October 2019. We remind that Pamier SARL is the 100% subsidiary of FPN, owning the Le Blanc-Mesnil plot. FIPP loans are therefore closer to the asset itself.
This move enabled FIPP to secure its loan through mortgages leaning on the asset itself (plot) and 100% of Pamier SARL shares. From an initial naked loan, FIPP loan is now secured, depriving other FPN’s shareholders from the remaining portion of unencumbered asset.
The natural consequence of it is that, coupled to fiscal claims, other shareholders’ risk increased significantly in FY 19.
Our estimates were unchanged. Balance sheet stays unbalanced and shareholder’s equity stays strongly negative. Changes in FIPP shareholder loan’s structure improved lenders’ priority order but deteriorated shareholder’s value.
FY 19 annual report didn’t mentioned a warrants’ neutralisation in H1 20. Warrants are key in the FPN’s valuation process.
Governance was unchanged, groupe Duménil still controls 100% of the Board.
