Tag Archives: Recapitalization

UPDATE 2-Agreement with CPPIB Canada helps Igua Brasil in the privatization of Cedae-source | Instant News


(Adds details about Igua’s interest in privatization, the advisor in charge of selling Cedae)

SAO PAULO, March 22 (Reuters) – Canadian pension fund CPPIB acquired a 45% stake in Brazilian sanitation company Igua Saneamento SA for 1.18 billion reais ($ 213 million), according to a statement on Monday.

CCPIB said it would acquire 514 million reais ($ 93.4 million) of new shares issued by Igua Saneamento and 664 million reais in existing shares.

The deal reinforces Igua’s bid for the privatization of Rio de Janeiro’s Cedae sanitation company, a source with knowledge of the matter said on Monday.

Igua has hired investment banking units Banco Bradesco SA and Banco BTG Pactual SA to advise on bids in the auction scheduled for April 31, added the person, who requested anonymity to reveal private discussions.

CPPIB’s support could also help fund another deal the company is considering, the privatization of the sanitation company Corsan, in the state of Rio Grande do Sul, the source added.

After CADE approves the acquisition of CPPIB, existing investor Alberta Investment Management Corporation (AIMCo) will hold a 39% stake in Igua, Brazilian development bank BNDES will own 11% and private equity firm IG4 Capital Group will retain 5%.

CPPIB said the two private equity funds managed by IG4’s asset managers would remain Igua’s controlling shareholders.

This new funding round underscores investor interest in the sanitation sector as new laws passed in June are expected to encourage states and cities to privatize water and sewage companies and to universalize services in Brazil.

For now, Igua is suspending plans for an immediate initial public offering expected for this year. However, Igua kept a mid-term plan for listing. The CPPIB acquisition contract has a clause in which the company commits to conduct an IPO within three years. ($ 1 = 5,5057 reais) (Reporting by Carolina Mandl and Tatiana Bautzer in Sao Paulo Editing by Bernadette Baum and Matthew Lewis)

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Italy to launch a 40 billion euro fund for companies hit by the virus: sources | Instant News


ROME (Reuters) – Italy plans to launch a fund worth up to 40 billion euros ($ 47.8 billion) this month to help its companies hit by the coronavirus crisis raise capital and strengthen their balance sheets, two sources with knowledge of the matter said.

FILE PHOTOS: A worker at the Liebherr manufacturing company in Collegno, Italy, May 5, 2020. REUTERS / Massimo Pinca

The so-called “Patrimonio Rilancio” is a special purpose vehicle (SPV) that will be financed by the Ministry of Finance through specially issued government bonds managed by state lender and equity investor Cassa Depositi e Prestiti (CDP).

The 170-year-old CDP, controlled by the Treasury Department with an 83% stake, is playing an increasingly active role in Italy Inc to keep strategic assets in national hands and reduce the economic damage caused by the pandemic.

Leveraging the European Union’s more flexible approach to country assistance in the face of a recession caused by COVID, the fund will invest in Italian non-financial companies with revenues above 50 million euros, over the next 12 years.

To provide financial support to the CDP, Rome will issue government bonds of up to 40 billion euros in stages, increasing the public debt pile that has matched 155.6% of national output at the end of last year, Italy’s post-war record.

The timing of the bond issuance will follow the capital injection agreement, said the two sources. The size of the initial phase will be set in a decree now being drafted by the Ministry of Finance, they added.

This scheme allows CDP to help companies experiencing severe financial difficulties. This can be done through a capital injection, bonds that can be converted into risky shares or subordinated debt, which are under senior debt in terms of repayment.

Italy’s economy shrank 8.9% in 2020, the sharpest annual recession since World War II. Business restrictions to contain the coronavirus continue to hurt prospects for recovery.

This week, it became the seventh country in the world to record more than 100,000 COVID-related deaths.

Dozens of companies with revenues of up to 500 million euros have expressed interest in proposing a Ministry of Finance-sponsored scheme, with a focus on convertible bonds and subordinated debt as preferred options, one of the sources said.

The companies, which are largely unregistered, operate in sectors that include agri-food, manufacturing, media, automotive supply chains and internet technology, the source added.

CDP could also use its funding sources to support healthier companies alongside private investors on ordinary market terms, and buy shares in listed companies it deems strategically important, according to government plans.

($ 1 = 0.8359 euros)

Edited by Gavin Jones and Emelia Sithole-Matarise

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Cerved Italia confirmed talks of the sale of its debt collection arm | Instant News


FILE PHOTO: New 100 euro banknotes seen in secret vault inside the Bank of Italy, in Rome 21 May 2019. Image taken 21 May 2019 REUTERS / Yara Nardi

(Reuters) – Italian credit group Cerved Group SPA confirmed talks of selling its debt collection arm in a statement on Sunday.

The confirmation came a day after Reuters reported on the company’s continued discussions with US investment firm Centerbridge for a deal.

“Cerved Group SpA confirms that negotiations are ongoing with private equity firms for the sale of a subsidiary of Cerved Credit Management Group Srl,” the statement said.

The company did not name the private equity firms involved in the talks.

Two sources told Reuters on Saturday that Cerved was in further talks with Centerbridge to confirm the sale of its long-awaited debt collection unit which is worth some 400 million euros ($ 475 million).

Centerbridge is a pioneer in discussions and could reach an agreement in the coming weeks, possibly paving the way for a full takeover of Milan-listed Cerved which has been on the radar screens of some heavyweights buying funds in recent years, the sources said.

($ 1 = 0.8391 euros)

Reporting by Aishwarya Nair in Bengaluru; Edited by Frances Kerry

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Cerved Italy in continued talks to strike a debt collection arm deal: sources | Instant News


MILAN (Reuters) – Italian credit group Cerved is in further talks with US investment firm Centerbridge to secure the sale of its long-awaited debt collection unit which is valued at around 400 million euros ($ 476.68 million), two sources told Reuters.

FILE PHOTO: New 100 euro banknotes spotted in secret vaults inside the Bank of Italy, in Rome May 21, 2019.Image taken May 21, 2019 REUTERS / Yara Nardi / File Photo

The unit is also attracting interest from Italian real estate and credit management firm Prelios and other private equity funds including Apollo and Apax, said the sources, who spoke on condition of anonymity.

Centerbridge is a pioneer in discussions and could reach an agreement in the coming weeks, possibly paving the way for a full takeover of Milan-listed Cerved which has been on the radar screens of some heavyweights buying funds in recent years, the sources said.

Cerved, Prelios and Apax declined to comment while Centerbridge and Apollo could not be reached for comment.

Cerved, which has a market value of 1.4 billion euros, nearly sold its credit management unit to Intrum, Europe’s biggest loan recovery company, in February 2020 – just weeks before the deadly coronavirus outbreak in northern Italy.

Intrum, which operates in Italy through a joint venture with Intesa Sanpaolo, valued Cerved Credit Management at around 500 million euros during negotiations last year but has since lost interest, the source said.

The coronavirus pandemic is now expected to spark a new wave of disrupted bank lending, reigniting investor interest in the Italian market where forecasts show an estimated 100 billion euros increase in worsening lending by the end of next year.

Centerbridge has extensive credit management experience in Italy where it acquired Banca Farmafactoring in 2015 from Apax and then registered it in Milan the following year.

Prelios, which is owned by Davidson Kempner Capital Management, has emerged as another strong contender for the business, which is ranked as one of Italy’s leading players in non-performing loan management, the sources said.

A former unit of Pirelli Italia group Prelios saw the purchase of Cerved Credit Management as a way to increase its valuation before Davidson Kempner implemented his exit strategy, perhaps with an initial public offering (IPO) on the Milan stock exchange, one of the sources said.

TAKE FULL?

The Cerved unit saw revenue decline by 12.3% from 126,289 euros in 2019 to 110,764 euros in 2020 due to the early termination of its collection contract with Monte dei Paschi in Siena and the impact of the pandemic.

The US private equity firm, Advent, approached a bid in early 2019 to buy all of Cerved’s share capital and make it private in a deal worth about 1.85 billion euros, but negotiations broke down soon after press reports revealed that discussions were underway to boost Cerved’s shares. price.

The source said the sale of Cerved’s credit management unit could rekindle interest from some buying funds that have been monitoring the company as a possible private equity target in recent years.

Cerved’s revenue and revenues fell 2.6% to 351.7 million euros in the nine months ended September 2020, with core revenue falling to 141.8 million euros from 155.1 million euros a year ago.

($ 1 = 0.8391 euros)

Reporting by Pamela Barbaglia and Valentina Za; Edited by Christina Fincher

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Germany sued former manager Steinhoff with balance sheet fraud | Instant News


BERLIN (Reuters) – German prosecutors have filed charges against three former managers at South African retailer Steinhoff for balance sheet fraud, three years after the company first revealed holes in its accounts.

The Oldenburg prosecutor’s office said on Thursday that it had filed charges against the three for allegedly manipulating the balance sheet to include fictitious transactions worth more than 1.5 billion euros ($ 1.8 billion).

The managers, who were not named, were also accused of overvaluing real estate at 820 million euros, investigators said.

Germany’s regional courts must now decide whether to open legal proceedings against managers. Balance sheet manipulation is punishable by up to three years in prison.

Steinhoff, who has operational headquarters in Stellenbosch near Cape Town in South Africa and traces its roots to Westerstede near Bremen in Germany, declined to comment.

Steinhoff first exposed the hole in his account in December 2017, surprising investors who had supported his reinvention from a small South African company to a multinational retailer in the vanguard of Europe’s discount furniture retail industry.

In the country’s largest corporate scandal, an investigation by PwC found in 2019 that the company recorded fictitious or irregular transactions totaling 6.5 billion euros between the 2009 and 2017 financial years.

PwC investigators found a small group of former Steinhoff executives and individuals from outside the company, who implemented the deals, which substantially increased the value of the group’s profits and assets.

The retailer, whose budgeted furniture, clothing and home appliances business spans four continents, is now focused on reducing debt by nearly 10 billion euros by selling off assets and part of its core business, such as the Pepco Group’s potential European listing.

($ 1 = 0.8312 euros)

Reporting by Jan Schwarz, Alexander Huebner and Nqobile Dludla. Written by Caroline Copley. Edited by Emma Thomasson and Mark Potter

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