(Bloomberg) — Cerberus Capital Management LP and Intrum AB are considering a broader partnership as the Swedish debt servicer explores options to deal with its debt.
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The U.S. alternative investor is considering further ways to invest in the company and its assets after purchasing a portfolio from the company earlier this year, the people said. The people, speaking on condition of anonymity because the details are private, said the talks were preliminary and may not yield any results.
Intram raised a net profit of 8.2 billion kroner ($769 million) when Cerberus agreed in January to pay 98% of the book value for a third of its bad debt portfolio.
Intram has been considering alternatives to address the looming maturities as high leverage and operational challenges limit access to debt capital markets. The company has 5.4 billion euros ($5.8 billion) in debt, with some loans due as early as July.
Representatives for Cerberus and Intram could not be reached for comment outside of normal business hours.
Bond traders are wary of debtor companies' own huge debts
Cerberus is one of the world's largest investors in distressed loans and is active in several European markets, including Italy, Spain and Cyprus.
Intram recently began working with advisors Houlihan Lokey and Milbank LLP and expects to begin discussions with bondholders, lenders and other stakeholders in the coming weeks.
“Serious options are on the table, including an extension, current compensation, and various levels of restructuring,” Intram CEO Andres Rubio said on a March 25 investor call. “There is,” he said.
Rubio also said the company could announce a capital partnership later this year that could have a “pretty dramatic” impact on its financials.
Meanwhile, creditors are divided into two groups. Some holders of bonds maturing in 2024 and 2025 have selected Weil, Gotshall & Manges LLP and Lazard as advisors, while Latham & Watkins and PJT Partners have selected Intram. It is advising another group that owns about 40% of the company's bonds.
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