Scott Olson/Getty Images News
Oatly Group AB (NASDAQ:OTLY) was defended at Mizuho after investors were rattled by the company's disclosure of plans to raise capital and amend shareholder agreements.
Shareholders with Oatly (OTLY) will vote on March 6 on approving an increase in the maximum number of shares to 2B from 1B and to authorize the sale of up to $300M in shares, warrants exercisable for shares, or convertible bonds to raise capital.
Despite the immediate share price drop, BofA analyst John Baumgartner and team view the Oatly (OTLY) news as positive as it addresses liquidity needs in 2023, increases capital flexibility, and will enable raising capital from board investors such as Blackstone and Verlinvest. "We do not believe this path implies an inability to secure a waiver from (unused) credit facility lenders for minimum EBITDA covenants," he noted. BofA kept a Buy rating on Oatly following the disclosure.
Oatly (OTLY) followed Tuesday's big drop with 3.33% decline in early trading on Wednesday.
The Seeking Alpha Quant Rating on Oatly (OTLY) is still flashing Sell but the quant score has moved up since the beginning of the year.