COPENHAGEN (Reuters) -Intrum, Europe’s biggest debt collector, said on Friday it will file for voluntary Chapter 11 bankruptcy protection in the United States as it seeks to restructure its own finances.
The company has struggled as the pandemic, an energy crisis and two-decade-high interest rates failed to unleash a wave of loan defaults, with concerns mounting over Intrum’s net debt, which reached 49.4 billion Swedish crowns ($4.69 billion) at the end of June.
“Intrum expects to emerge from the prepackaged Chapter 11 process and the Swedish company reorganisation process with ample runway and liquidity to execute its business plan and positioned for long term growth and success,” it said in a statement.
Shares in the company fell 2.8% at 0802 GMT.
Intrum had won support for a debt restructuring from 73% of its noteholders, enough for a U.S. Chapter 11 procedure but short of the 75% needed to qualify for a simpler process under English law or a 90% threshold for an all-voluntary process.
Achieving higher levels of consent would simplify the implementation and reduce costs, CEO Andres Rubio said in July, adding that 90% would be optimal, with two-thirds the bare minimum requirement.
The company expects to start the Chapter 11 proceedings by mid-November and get approval of the restructuring plan by year-end, it said, adding this would result in the recapitalisation taking effect during the first quarter of next year.
The move by Intrum comes at a time when the debt collection industry in Europe faces challenges, with a significant decline in non-performing loans diminishing the volume of business available for these companies.
($1 = 10.5304 Swedish crowns)
(Reporting by Stine Jacobsen, editing by Terje Solsvik and Tpmasz Janowski)
