(Bloomberg) -- Two groups of creditors opposed to Swedish debt collector Intrum AB’s restructuring plan have taken a step toward closer collaboration by working with the same financial adviser.
Some holders of Swedish kronor notes advised by Ropes & Gray LLP and local law firm Gernandt & Danielsson will now seek advice from Lazard & Co, according to an emailed statement. Lazard has also been advising a separate set of creditors holding some of Intrum’s euro notes due in 2025.
The two ad-hoc groups do not support the company’s plan and claim it fails to respect temporal ranking — the convention that shorter-dated notes should outrank longer-dated ones — and contractual rights, the statement said. They hold in total 18% of the debt collector’s unsecured bonds and would be willing to collaborate with the company on a consensual restructuring, under the right terms.
“Any attempt to implement the proposed transaction through an insolvency process would be inappropriate, face serious legal challenges and carry significant risks for the business,” the statement said.
A spokesperson for Intrum declined to comment.
The Swedish firm has been looking to push through a proposal — agreed with almost three-quarters of its bondholders — entailing a three-year extension of 90% of the nominal value of its bonds maturing from 2025 onwards. As compensation for the 10% haircut, bondholders would receive incentive fees and 10% equity in the company.
In spite of the opposition of some bondholders, Intrum is preparing to implement its proposal, which it sees as beneficial for all stakeholders, according to two people familiar with the matter, who spoke to Bloomberg on the condition of anonymity.
The company has so far garnered the support of 71% of its bondholders. It has yet to pick an implementation route. With a level of consent of more than two-thirds of its creditors, Intrum could implement the deal via a Chapter 11 process in the US or a Swedish reorganization proceeding.
However, the company could instead opt for a UK court restructuring process — a potentially cheaper option — if support were to surpass 75%.
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