On 15 April, Tuesday, Intrum will hold a shareholders meeting for approving a recapitalization and a debt restructuring. The company also owns 51% of Intrum Italy (49% Intesa Sanpaolo), which is the second-largest servicer by assets under management in the PwC ranking at the end of June 2024
Troubled Stockolm – listed credit servicer and NPEs investor Intrum AB (see here a previous post by BeBeez) and Cerberus Capital Management closed the agreement that announced in July 2024 (press release). The firms will invest up to one billion euros per year in unsecured consumer NPL portfolios in all countries where the Swedish company operates. Cerberus will provide 70% of the resources while Intrum will invest 30% of less.
Such a partnership will allow Intrum to scale its activity without borrowing resources for acquiring NPL portfolios while providing service revenues and additional income from the investment management in line with the firm’s capital-light strategy.
Intrum will also sign for 5 years servicing contracts for the portfolio that will buy with this partnership and for which it will act as maintenance manager with some exceptions and get market-based fees that will generate new revenues. The servicing firm will get payments for execution, portfolio management and performance-based income.
Andrés Rubio, Intrum chairman and ceo, said: “The finalisation of this partnership is another milestone in Intrum’s capital-light strategy. Cerberus is an ideal strategic partner, and this agreement further strengthens our position in a macro environment that is driving strong demand for credit management and investment services. We developed strong momentum since we started our partnership with Cerberus in July 2024 and agreed to acquire 12 portfolios together while we have a strong pipeline of investment opportunities ahead.”
David Teitelbaum, Cerberus Global Investments chairman and global head of Real Estate, Non-Performing Loans and Financial Opportunities, pointed out: “Our partnership with Intrum highlights our shared focus on emerging opportunities in the unsecured lending sector. This collaboration strengthens our investment capabilities and positions us as a leader in a dynamic sector. We look forward to continuing to work successfully with Intrum and provide attractive solutions across Europe.”
PWC Projections
Intrum owns 51% of Intrum Italy, a joint venture born in 2019 with 900 workers and 23 bureaus in 22 cities of which Intesa Sanpaolo has 49% (see here a previous post by BeBeez). PwC 2024 Report about Italy’s NPL Market ranks Intrum Italy as the second largest special servicer in the country with 37.6 billion euros of aums at the end of June 2024. In November and December 2024, the firm signed seven contracts for handling banking portfolios of UTPs and NPLs with an aggregate value of above 1.2 billion that include leasing contracts worth in the region of 500 million (see here a previous post by BeBeez).
Intrum Group is born in 2017 out of the merger of Norway’s Lindorff (part of Nordic Capital) and Swedish Intrum Justitia (see here a previous post by BeBeez). The company is the European leader for the credit servicing sector and has 10000 workers that collaborte with 80000 firms.
In 2024, the firm posted a turnover in the region of 1.7 billion (1.5 billion in 2023) ( analysts presentation). However, the liabilities started to grow since 2022 as interest rates arouse leading to a 2024 net loss of 185 million. For such a reason, in January 2024, Intrum sold to Cerberus a 65% of a 33 billion worth unsecured NPL porfolio (see here a previous post by BeBeez) and signed the announced partnership with the buyer. Intrum is also holding talks with its lender for a 4.5 billion debt restructuring.
In October 2024, Intrum said it wanted to start a process for Prepackaged Chapter 11 Solecitation in order to accomplish a restructuring of its debt while converting part of it in equity and extending the maturities (see here a previous post by BeBeez). On 15 November 2024, Intrum and its subsidiary Intrum AB of Texas LLC filed a voluntary petition for Chapter 11 relief in the US Bankruptcy Court for the Southern District of Texas (press release) and a few days later sent their Joint Pre-Packaged Plan of Reorganisation and related Information Statement (court case information and documents). On 31 December 2024, the judge Christopher M. Lopez issued an approval for the Plan (press release). This is a crucial step for the recapitalisation, which Intrum should complete by the end 2H25. Stockholm court provided a similar green light from the to take full effect in Sweden. On 15 April, Tuesday, the company and its lenders will discuss whether to approve the proposed restructuring plan (see here the call for meeting) at Stockholm District Court.
The lenders that provided 97% of a revolving credit facilty and the bondholders that invested in 85% of the issuances already accepted the restructuring plan and signed for a lock-up for the liabilities that they own while having the opportunity to subscribe pro-rata new obligations worth more than 526.3 million US Dollars at the price of 98% of the nominal value and to receive ordinary shares in proportion to their claims up to 10% of the capital (US plan page 82 and 103). The list of Intrum’s creditors include Davidson Kempner Capital Management, BlackRock, HIG Capital, Mandatum Asset Management, and Arini Capital Management.
