Orpea will reduce its international activities

Nov 15 (Reuters) – France’s Orpea , hit by allegations of malpractice at its French retirement homes, said on Tuesday it would scale back its international business and focus on its core business as he planned to convert nearly four billion euros of debt into new shares.

The company, which has lost 90% of its market capitalization this year, said in June that an independent audit had found evidence of financial wrongdoing, and in October warned of asset write-downs and said that she had requested talks with the creditors.

Orpea shares fell 9.6% at the market open on Tuesday before paring losses to trade down 0.7%.

“A lot of these countries are countries that we have recently entered under this somewhat uncontrolled international development policy,” CEO Laurent Guillot said of the international retreat on a call with reporters, mentioning the China as well as operations in Latin America and Europe.

Orpea said it plans to convert 3.8 billion euros ($3.9 billion) of unsecured debt into equity through a rights issue to existing shareholders, backed by incumbent lenders. of their debts.

The group also hopes to provide 1.9 to 2.1 billion euros of additional cash via new secured debt of 600 million euros to cover its financing needs until the beginning of summer 2023, and a second increase. capital.

Orpea, with gross debt of 9.53 billion euros at the end of September, defended its strategy last week after two minority shareholders opposed to the debt restructuring plan called a general meeting.

The group is aiming for annual revenue growth of 9% by 2025, with an operating margin above 20% and a basic result of around 745 million euros that year.

Orpea said it expects profitability to deteriorate this year due to high inflation, lower than expected occupancy rates and lower post-COVID subsidies.

The company also aims to reduce work-related accidents by a fifth by 2025, Guillot said, noting that Orpea’s accident frequency rate in France was more than double that of the construction sector.

($1 = 0.9681 euros)

Reporting by Diana Mandiá in Gdansk; Editing by Kirsten Donovan

Our standards: The Thomson Reuters Trust Principles.

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