Sale of Company Loans
- Thread starter dewdrop
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Brendan Burgess
Founder
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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.
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.
"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!
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!