Intrum (INTRUM.ST), Europe’s largest debt collector, filed for Chapter 11 bankruptcy in the United States on Friday as part of its strategy to restructure its debt.
The company has faced challenges stemming from the pandemic, an energy crisis, and two-decade-high interest rates, which failed to trigger a surge in loan defaults. At the end of September, Intrum’s net debt reached 49.4 billion Swedish crowns ($4.49 billion), raising concerns among stakeholders.
In a court filing, Intrum disclosed assets and liabilities valued between $1 billion and $10 billion and identified between 1,000 and 5,000 creditors. Last month, the company announced its intention to pursue Chapter 11 protection. CEO Andres Rubio expressed optimism about the process, stating, “Today, with support from the overwhelming majority of our key stakeholders, we are making significant progress towards the implementation of our recapitalization transaction.”
The company secured support for its debt restructuring from 73% of its noteholders, sufficient for a U.S. Chapter 11 process but falling short of the 75% needed for a simpler procedure under English law or the 90% threshold required for an entirely voluntary process.
Intrum confirmed it would maintain normal operations during the proceedings, ensuring no disruption to its services. The company assured stakeholders that it has enough liquidity to continue operating and implementing its business plan throughout the Chapter 11 case. Intrum also plans to retain its existing management team and board of directors while maintaining control over its assets during the bankruptcy process.
The debt collection industry in Europe has faced significant challenges due to a decline in non-performing loans, reducing the volume of business available for firms like Intrum. The company anticipates completing its Chapter 11 proceedings before the end of 2024 and intends to initiate a Swedish company reorganization in the first quarter of 2025.
At Friday’s exchange rate, $1 equaled 10.9958 Swedish crowns.
