Intrum as an investment

Stocks
835

I must admit that after that deliberation, when news of the general meeting came, I already suspected they wouldn’t buy at all. The insider’s advantage would be for the share price on 10.6. to be as low as possible, and only after the incentive program purchases would it be worth buying with one’s own money, if buying at all.

But this is also good, honest dealings from Rubio. :+1:

Later, after 10.6., roughly 90 million kronor worth of share purchases would be good for the daily trading volume, unless they more likely buy them directly from Nordic Capital outside the stock exchange.

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836

A few thoughts:

  • Many funds, or institutions, cannot (or may not be able to) buy shares due to their rules while debt restructuring is ongoing. Just by looking at the daily trading volumes, this seems to be the case. Once the restructuring is over, there will be more buying interest (although many who receive shares in the debt restructuring may also dump them immediately). Big moves possible (direction first down, then up?)
  • After the debt restructuring, Intrum could be an acquisition target. For example, Cerberus could see added value, as the pursued “capital light” model is already based on cooperation…if it works, the valuation is relatively cheap for a buyout.

On a general level, I would find it strange if Intrum didn’t trade over 20% higher than today by the end of the year.

Disclaimer: I am long myself.

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837

I expect a mild reaction once the dilution has occurred; I’d guess the most likely group would be those 25 bondholders (who would exit quickly), and I base this thought on how Intrum’s voting results went back then.

A couple of months have passed, and NC hasn’t been busy selling, but let’s see once the owner list is updated for May.

[ Virossa taotaan miljoonia suomalaisten pelihimolla – Suomeen ajettu lisenssi on fiasko ] Finland’s Millions Flow to Estonia – Behind It Are Illegalities, Side Effects, and Fictitious Companies

The title already says it all, meaning Intrum will have plenty of customers in Finland too.

June will likely offer events, with the AGM on 10.6., one could still say there will certainly be some wind in one direction or another. But it’s a pretty good expectation that the direction will be positive in the longer run.

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838

Intrum’s printer has been busy today, as they have printed 13,524,546 new shares to be distributed to bondholders later, which corresponds to an 11.1% dilution. The train is proceeding according to plan.

Edit: @Arvuuttaja, referring to your previous message, wasn’t the reluctance of those 25 bondholders to vote for the restructuring related to an attempt to get a larger piece of Intrum’s business through the courtroom? Since that didn’t succeed, I understood they went long on Intrum. Their eagerness to sell isn’t self-evident, is it, or have I misunderstood the turns of events? They never really considered Intrum a lost cause; they just saw the value of the underlying business and got greedy.

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839

Even though this dilution has been priced into the stock many times over, it is possible that the markets will react negatively to it. I reserved some cash aside in case of a potential buying opportunity.

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840

The Swedish authority has realized that Intrum is reorganizing debts, time to investigate. I, for one, am not worried about this, as these have already been in court for over half a year.

From Nordnet:

STOCKHOLM (Nyhetsbyrån Direkt) The Financial Supervisory Authority (FI) will investigate whether Intrum’s reconstruction affects the company’s ability to conduct business.

This is stated in a press release from the authority.

What will be investigated further is Intrum Sweden’s conditions for conducting business according to the law on the acquisition and management of non-performing credit agreements.

No timetable is given for the authority’s investigation.

In Finnish:

STOCKHOLM (News Agency Direkt) The Financial Supervisory Authority (FI) is investigating whether Intrum’s restructuring affects the company’s prerequisites for conducting business.

This is evident from the authority’s press release.

More specifically, the investigation concerns Intrum Sweden’s conditions for conducting business according to the law on the acquisition and management of credit agreements in distress.

No deadline is given for the authority’s investigation.

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842

The list was updated and a couple of million NC likely reduced on bigger trading days.

I replied to Kultapossu earlier in a private message. But if those bond 25 were hoping to get their money earlier than other shareholders, then now from that dilution pile they will get approximately 2 million shares.

And professional investors can treat their Intrum quite coldly; perhaps some expected catalyst that should make the stock rise significantly will dull the edge of the rise… much like NC does. Not catastrophically for the share price.

A kind of hidden distribution.

Not necessarily bad news for a long-term investor, it gives more time to evaluate their investment and follow the development of Intrum’s figures.

Stands out…
The name Kerstin Danielsson, who added approx. 600,000 shares.

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843

Intrum indeed faces a situation somewhat similar to a normal directed issue. Similarly, some recipients of the new shares immediately put them on the market. Fortunately, in this case, the shares are ‘market-priced,’ meaning selling them immediately doesn’t yield the same profit as institutions make by selling discounted shares obtained from normal directed issues.

Hopefully, however, most of those intending to sell will wait at least until Intrum gets out of default rating, after which funds and others can buy more freely and there will be demand for the shares.

Most of the bond 25 owners seemed to indeed be just milking more money/shares, so that group contains the most likely sellers. Fortunately, a couple of million shares are quickly absorbed by the market if volumes rise even a little.

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844

Bond investors will probably sell them off quite quickly.

What day are they freely tradable?

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845

There is no exact information about that yet. The whole thing should be wrapped up by the beginning of Q3, meaning July/August is the most likely time.

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846

If/when a more precise date becomes clear, I would greatly appreciate it if you would let us know here. It sounds like a good opportunity to add it when there’s known pent-up sales pressure. :slight_smile:

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June 9th, the Swedish judgment gains legal force
July 10th, forecast in CH11 documentation regarding dates for issuing new bonds and shares to Old Equity (OÄ)
July 25th, Intrum presents the Q2 report
(Source: Swedish Discord channel)

A new document also arrived at Kroll a couple of days ago (docket 379, pages 152-156), which contains those indicative dates.

But it is likely that Intrum will still issue a press release about the dates according to which they intend to proceed.

And it’s good to remember that once the process has gone through, credit rating agencies will re-evaluate their ratings. Moody’s already has a warning in place, suggesting that the plug might be pulled quite quickly from others too once the capital restructuring has been implemented.

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849

It says above that the decision will become legally binding on June 9th. Is this then a restructuring decision, after which creditworthiness will be re-evaluated?

850

Not to my understanding. Trading in several maturing Medium Term Notes (MTN) will be blocked tomorrow. On June 10th, the Annual General Meeting where shareholders have the opportunity to influence Intrum’s debt and ownership arrangements – and may cause share price movement.

Intrum expects the completion of the Closing Phase, i.e., the restructuring, in early July 2025, when all conditions are met. This “Effective Date” includes the exchange of bonds, the issuance of new debt, and the restoration of share capital.

I have read from several sources that the credit rating will rise immediately thereafter.

Please note that I have misinterpreted several Intrum announcements, relied on incorrect online interpretations, and shared them as true. Therefore, do not trust anything I have written.

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851

Intrum just released a PR containing instructions and deadlines regarding the final steps of the restructuring, for which a preliminary implementation date of July 10th was also given.

To my understanding, the distribution of new shares is linked to the official completion of the restructuring, meaning the new shares would become marketable as soon as the arrangement comes into effect. If credit rating agencies were to publish their pre-prepared new assessments immediately afterwards, I can imagine quite an eventful day. Without new credit ratings, the day could turn into a good buying opportunity.

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852

Intrum invites noteholders to claim their exchange entitlements and to participate in the rights offering for new money notes as part of its Recapitalisation Transaction

today at 09.00 ∙ MFN

Notice to holders of senior unsecured notes issued by Intrum AB (publ) with identifiers (“ISIN”): XS2211136168 / XS2211137059; XS2034925375 / XS2034928122; XS2052216111 / XS2052216202; XS2566292160 / XS2566291865; and XS2093168115; and medium-term notes issued by Intrum AB (publ) with identifiers: SE0013105533; SE0013105525; SE0013104080; and SE0013360435 (the “Notes” and holders of the Notes, the “Noteholders”)
Unless given a different meaning in this press release, terms defined in the press releases from July 2024 to May 2025 have the same meaning when used herein.

As one of the final steps in the implementation of its Recapitalisation Transaction, Intrum is pleased to invite each Noteholder to:

(i) claim its Exchange Note and Noteholder Ordinary Share entitlements; and

(ii) (at each Noteholder’s option) participate in the rights offering to subscribe for up to its pro rata share of New Money Notes, or to appoint a nominee to participate (subject to subscriber eligibility),

in each case in accordance with Intrum’s Chapter 11 Plan and Swedish Reorganisation Plan.

It is strongly recommended that Noteholders claim their entitlements in accordance with the below instructions by the specified deadline. Exchange Note and Noteholder Ordinary Share entitlements that are not claimed by Noteholders will be delivered to the designated holding period trustee, and Noteholders will need to take additional steps to retrieve such entitlements. [1]

Closing of the Recapitalisation Transaction is expected to occur by mid-July. On the closing date (i) the Exchange Notes and New Money Notes will be issued, (ii) the Noteholder Ordinary Shares will be distributed and (iii) the existing Notes will be cancelled. The Company currently expects that pending regulatory approvals required to complete the hive-down will be received prior to the closing date.

Instructions for Noteholders

Noteholders that wish to claim their Exchange Note and Noteholder Ordinary Share entitlements are strongly encouraged to do so by following the instructions set out in and completing the Holder Registration Form, which is available on the Information Agent’s dedicated portal accessible here – https://deals.is.kroll.com/intrum.

Noteholders are also invited to subscribe for the New Money Notes (subject to subscriber eligibility) by following the instructions set out in and completing the Holder Subscription Form, which is available on the Information Agent’s dedicated portal accessible here –https://deals.is.kroll.com/intrum. Eligibility requirements are set out in the ‘Rights Offering Procedures’, which is also available on the Information Agent’s dedicated portal.

As further described in the Holder Registration Form and Rights Offering Procedures, the relevant deadlines for Noteholders are as follows:

  • 5 p.m. CEST on 20 June 2025 – Subscription Instruction Deadline / Noteholder Record Date / Custody Instructions Deadline

Deadline for Noteholders to submit their forms to claim their Exchange Note & Noteholder Ordinary Share entitlements and subscribe for the New Money Notes.

The steps to be completed are as follows:

  1. Holder Registration Form to be submitted,
  2. Holder Subscription Form (and documents noted therein) to be submitted (in case of participation in the New Money Notes only), and
  3. electronic instructions to block Notes (including UIR generated upon submission of the Holder Registration Form / Holder Subscription Form, as applicable) to be sent, or in the case of MTNs held through Euroclear Sweden, UIR to be delivered to the directly registered owners (Swedish: direktregistrerade ägare) of the MTNs.

Important Note: entitlements to Exchange Notes, Noteholder Ordinary Shares and New Money Notes will be calculated by reference to the Noteholder Record Date.

  • 30 June 2025 – Initial Funding Letters Date

If a Noteholder (or appointed nominee) has elected to subscribe for up to its pro rata entitlement to New Money Notes, it will receive an Initial Funding Letter from the Information Agent on this date which will state its allocation of New Money Notes and funding details for the purchase price of the New Money Notes.

The Initial Funding Letters sent to Backstop Providers will also set out their allocation of backstopped New Money Notes and funding details in respect of the same.

  • 1 p.m. CEST on 3 July 2025 – Subscription Payment Deadline

Deadline for subscribers of the New Money Notes to fund the purchase price of the New Money Notes in accordance with their Initial Funding Letter.

  • 1 p.m. CEST on 4 July 2025 – Supplemental Funding Letters Date

If required (e.g. if a subscriber fails to fund by the Subscription Payment Deadline), each Backstop Provider of the New Money Notes will receive a Supplemental Funding Letter from the Information Agent on this date which will state its revised allocation of New Money Notes and funding details for the purchase price of its additional allocation of New Money Notes.

  • 1 p.m. CEST on 8 July 2025 – Backstop Funding Deadline

If required, deadline for Backstop Providers of the New Money Notes to fund (directly or indirectly through one or more of their nominees) the revised purchase price of the New Money Notes in accordance with their Supplemental Funding Letter.

  • 10 July 2025 – Anticipated Restructuring Effective Date / Closing Date

The Company reminds all Backstop Providers that they are contractually committed to subscribe (directly or indirectly through one or more of their nominees) for the New Money Notes.

Important Note: The above noted deadlines may be amended or extended at any time by the Company in consultation with the Majority Backstop Providers.

“Closing of the Recapitalisation Transaction is expected to occur by mid-July. On the closing date (i) the Exchange Notes and New Money Notes will be issued, (ii) the Noteholder Ordinary Shares will be distributed and (iii) the existing Notes will be cancelled. The Company currently expects that pending regulatory approvals required to complete the hive-down will be received prior to the closing date.”

So, according to that, the new shares will be distributed in mid-July. There are more precise dates at the end, so could July 10th be the exact date?

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853

Alex Grove, Head of Investment Management, has recently made a purchase.

https://allaaktier.se/intrum/insider

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854

That July 10th is, of course, half a week later than what was previously announced (the first week of July). It doesn’t matter in the long run, but hopefully, that date will hold now. However, there have been plenty of delays. There are, of course, matters in the background independent of Intrum (lawsuits + appeal processes), but Intrum was also too naive with the dates from the start.

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855

Let’s add one more point:

  • Intrum has 121.7 million shares before the new issue, of which about 4.5% (i.e., about 5.5 M) are short. With current daily trading volumes, covering is painful:

image

I would assume that when the new shares (13.5 M) come to the market, short covering will also occur, leading to a certain counter-reaction. The stock’s movements might be significant when the new shares become available for trading.

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856

Has anyone already interpreted today’s news?

https://www.fitchratings.com/research/non-bank-financial-institutions/fitch-affirms-intrum-withdraws-ratings-12-06-2025

So Fitch has affirmed its previous rating for Intrum (D), after which Fitch has withdrawn all its ratings for commercial reasons, and will no longer analyze or rate Intrum in the future.

Mainly, I’m wondering if there are any other alternatives to what happened, besides Intrum having cut off funding to Fitch and no longer paying for ratings to that rating agency?

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