Intrum is pushing through its recap deal with a pre-packaged chapter 11 after months of talks with the dissenting 2025 bondholders were unable to reach a consensual outcome.
The company has held talks with the holdout creditors during August, September and this month, according to the chapter 11 disclosure statement. As of now, “however, the dissenting groups have not agreed to support the restructuring transactions”, it said.
Intrum is now seeking bondholder votes for the pre-pack chapter 11 process. Around 73% of all bondholders are locked up to the deal and bound to vote for the chapter 11 consent process, comfortably in excess of the two-thirds threshold.
The voting deadline is November 13, with the first US court hearing scheduled for November 17. The chapter 11 filing will be made under the United States Bankruptcy Code in the Southern District of Texas.
A pre-packaged chapter 11 features a restructuring plan that the company prepares in cooperation with its creditors – saving time and costs compared with a process under which stakeholder negotiations take place.
Under the proposed timetable, objections to the process are due by December 15 with a combined hearing to confirm the plan set for December 20. Subject to court approval, the restructuring would become effective in Q1 2025.
Intrum is also planning to use a Swedish company reorganisation to implement the restructuring, to ensure the results of the chapter 11 process are given equal effect in Sweden.
In relation to this, Intrum is also seeking consents under the Swedish law-governed MTNs and has called meetings for November 15 at which noteholders will be asked to approve amendments to facilitate the chapter 11 process and the restructuring. More on the MTN consent solicitation is available here.
The company intends to complete the Swedish company reorganisation by Q1 2025.
Intrum’s restructuring features:
– a two-year extension of the RCF maturity to June 30, 2028 and a reduction from $1.962bn to $1.199bn in exchange for a pricing increase, and an enhanced collateral package;
– exchange of the €3.2bn unsecured notes into second-lien notes at a 10% discount to face value with staggered maturity dates from 2027 to 2030 in exchange for 10% of post-dilution equity;
– fully-backstopped new-money injection of ~€526mn in new secured notes to be utilised for discounted buy-backs.
Intrum’s longer-dated bondholder group is advised by PJT Partners and Latham & Watkins. The dissenting holders are working with Lazard, Weil and Ropes & Gray.
The RCF lenders, predominately Nordic and Swedish banks, are working with Rothschild and Clifford Chance. Intrum itself is working with Houlihan Lokey and Milbank.
Intrum is scheduled to report Q3 2024 results on October 23, with a conference call at 08.00 UKT, available here.
Matt Dickinson
matt.dickinson@levfininsights.com
+44 (0)20 7280 9694
