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
Corporate Receiverships
Total Insolvencies
1400
1200
1000
300
297
250
1282
1015
800
254
200
150
600
100
400
200
50
0
0
Jan to Sept 2012
Jan to Sept 2013
Year on year decrease of 20%
Predicted 2013 total: 1,300+
Jan to Sept 2012
Year on year decrease of 14%
2012 overall total: 1,684
*statistics do not include personal asset receivership
Jan to Sept 2013
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