"Debt collector" Intrum itself is mired in debt

Intrum, the company that collects Greeks' “red” loans, has begun restructuring its debt, which amounts to $5.7 billion.

Europe's largest debt management company is unable to manage its own debts and is therefore embarking on a restructuring with the support of some bondholders.

The question involuntarily arises: What is Intrum's strategy for collecting and managing the “red” loans of indebted households, if the company has reached the point where it has had to restructure to pay off its own debts? How are such companies given the opportunity to collect the Greeks' loans, and how does this over-indebted company manage the debts of others?

According to available information, Intrum in Greece manages the credit claims of approximately 700,000 borrowers of all typesindividuals and legal entities from all sectors of the economy, with or without collateral. And again a question about Intrum:

When he tightens the “noose around the neck” of those who are in debt or late in repaying their debts, now that he has a “noose around his own neck”, will he put additional pressure on his clients?

The company tried to take advantage of a period of low interest rates to buy up portfolios of consumer loans at bargain prices, but is now unable to repay its debt. As it admitted, Intrum is struggling with higher borrowing costs and slowing operations and appears to have reached the point where it has to manage its own debt.

Generally The European debt collection sector is under pressure from increased competition and rising funding costs. The proposed Intrum deal, Bloomberg writes, provides for the full repayment of the bonds in 2024, as well as a three-year extension of 90% of the face value of the remaining bonds. As compensation, bondholders will receive incentive payments, as well as 10% of the company's shares. At the same time, it will sell 526 million new bonds, with part of the proceeds to be used to buy back convertible debt.

As the company stated, The agreement was signed by 66.7% of bondholders, and Intrum “strongly urges the remaining bondholders to support the recapitalization transaction.”

However, from a group of creditors who hold the majority of the company's bonds due in 2025, the deal has sparked a backlash, writes newsbeast.gr Its members signed a cooperation agreement aimed at improving the terms of the restructuring, and in the letter asked to see confidential correspondence between the company and the funds allocated under the restructuring agreement.

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