# Sale of Company Loans



## dewdrop (13 Dec 2013)

I often read when a companys loans have been sold the purchaser acquires control of the company. Does this arise when the security for the loans includes a charge over the companys shares thus conveying the control?


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## Brendan Burgess (13 Dec 2013)

The lender or the acquirer would only get control if the borrower was in arrears on their loans. 

In the case of the Quinn Group, a receiver was appointed to the shares in the group, because the shares had been given as security for loans.

In most other cases, the company gives property as security for loans and the lender can appoint a receiver to sell the property. 

In some cases - Arnotts may be an example - the loans are written down and the lenders are given shares in the company instead, thus effectively taking control.


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## Kine (13 Dec 2013)

"Loan to Own"

Commonly used by quite a lot of high return investment funds - if a company is underperforming it's debt would trade for cheaper than par value (you might buy it for 70c/€). You will generally find banks will have impaired the loan in a previous accounting year (probably for 60c/€) and the sale allows them to de-risk their loan book and write back some profit. Simples!


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