Insights from the Corporate Restructuring Summit 2013: Trends, Debt, and Future Outlook
The Corporate Restructuring Summit 2013, led by Tom Kavanagh of Kavanagh Fennell, highlighted key trends and developments in corporate restructuring, focusing on large property sales, debt restructuring, and personal insolvency. A year-on-year decrease in insolvency cases was observed, predicting a total of over 1,300 for 2013. Significant property sales were noted, including the €306m Treasury Portfolio. The discussions also covered the evolving landscape for banks and borrowers, emphasizing the importance of valuation and the rise in fixed asset enforcement as we look towards the next twelve months.
Insights from the Corporate Restructuring Summit 2013: Trends, Debt, and Future Outlook
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Presentation Transcript
CORPORATE RESTRUCTURING SUMMIT Tom Kavanagh kavanaghfennell 25th September 2013
Contents • Trends & Developments • Large Property Sales • IBRC • Debt Restructuring • Personal Insolvency • Outlook for the next 12 months
www.insolvencyjournal.ie Year on year decrease of 20% Year on year decrease of 14% Predicted 2013 total: 1,300+ 2012 overall total: 1,684 *statistics do not include personal asset receivership
Trends & Developments • Receiverships – Differing strategies • Examinership – B&Q, Pamela Scott, Sunday Business Post, Barna Waste • IBRC Liquidation • Portfolio Sales – Aspen, River, IBRC, Ulysses, Arc, O’Flynn • Servicing Contracts – Certus, Capita, Pepper • PE firms, REITs + QIFs • Spike in Fixed Asset enforcement • Charles Allen ‘Trust’
Large Property Sales • Treasury Portfolio - €306m • Clancy Quay- €82m • Vet College- €22m • Gemini Portfolio- €65m • Bishops Square- €65m • River Island Building - €40m • La Touche House- €35m • 4 Apartment Blocks- Capreit - €42m • Marker, Ritz Carlton, Burlington , Trinity Plaza
IBRC • Debtor purchase, PE firms or NAMA • Valuation is the key • Debtors – No certainty on banking counterparty • Further uncertainty for trading businesses • INBS book - NAMA?
Debt Restructuring Borrower Perspective • Private Equity • Exiting Banks • Pillar Banks • Loan Service Providers • Debt Collection Agencies Bank’s Perspective • Long-term market participants • Capital Efficiency • Restructure is easier on balance sheet • Future interest income
Debt Restructuring The Return of Capital • Dublin awash with hungry money • Provides Banks with option of taking market • Exiting Banks / Bad Bank run offs / NAMA • Vendor appetite for portfolio sales Models • Senior Debt profile structured around free cashflow • Residual debt: • Stretch and forgive, equity fee notes, zero coupon parking • Margin debate (higher senior debt v interest rate return) • i.e. €5m @ 4% margin = €5.73m @ 2%
Debt Restructuring Issues and Obstacles • Family Homes • Documentation and Fulfilment • Provisioning inadequacy • Borrower fatigue • Contagion fear
Personal Insolvency • Insolvency Service of Ireland • Formal Arrangements - Banks not favourable? • Borrowers left with Hobson’s choice • Consensual restructuring or Bankruptcy • Exception – multi banked borrowers
Outlook For Next 12 Months • Higher volume of asset sales • Portfolio Sales to pick up • IBRC outcome • Restructuring – real progress • Surge in Fixed Asset enforcement • Examinership ‘Light’ • Personal Insolvency – fall out • Sentiment – inching forward
