Reorg on the Record: Global markets wrestling with turbulence (03/09/22)
Introduction written from London by Mario Oliviero, Managing Director, International Credit || The tragedy of the Russian invasion of Ukraine has thrown European sub-investment grade markets into a new reality. Primary markets are shut to new deals and secondary is rife with volatility. Russia’s economy may be smaller than Italy’s but its progressive isolation from the World economy is going to impact European economies and debt issuers both directly – companies with trade relationships with Russia/Ukraine, and indirectly – supply chain disruptions commodity prices. An increase in commodities prices will impact consumers, bar any Central bank/government extraordinary intervention overall demand will suffer. With inflation rising due to exogenous factors and low/no economic growth, Europe could enter stagflation, a deja vu from the oil shocks of the 1970s. This is obviously all conjecture and the long term is hard to predict due to the political situations, but in the short to medium-term investors should expect extreme volatility, more distressed activity and some portfolio rebalancing.
Reorg is tracking several issuers severely hit such as Hilding Anders with loans in the 60s, Oriflame, EP Infrastructure and many more.
Our European teams are delivering the most in-depth data, analysis and reporting on thousands of credits that are either stressed, distressed, performing, going through restructuring or post-reorg. Below is a glimpse into our editorial offering:
Gazprom/Russia
Russian assets are continuing their descent this week as Western leaders continue to hit Russia with further sanctions and debt investors try to grasp how the country will approach future debt obligations. Investors are turning their backs on Russia’s industrial flagships, sending their share prices on Western exchanges tumbling. » Continue Reading
Hilding Anders
Sweden-based mattress producer Hilding Anders’ primary asset, its Russian business, was responsible for generating 52% of its €96.5 million EBITDA for the 12 months to Nov. 30, 2021. But Russia’s decision to invade Ukraine and the subsequent sanctions imposed on it by the West, plus the resultant slump of the ruble, is likely to severely impact the group’s performance in Russia. » Continue Reading
Prefere Resins
Silverfleet’s sale of German phenolic and amino resins manufacturer Prefere Resins is not running as smoothly as planned, sources told Reorg. The company appears to be in the final bidding round but sources said that its exposure to Russia could put the deal at risk. » Continue Reading
Polyus
Bids for Russian gold miner Polyus’ eurobonds have dried up and its share price has crumpled on the London Stock Exchange after the imposition of Western sanctions on Russia since its invasion on Feb. 24. The LSE-listed dollar-denominated share price has collapsed to $3.90 this week from $83 on Feb. 23, losing 96% of its value through the period. » Continue Reading
GenesisCare
Australia-headquartered global cancer treatment provider GenesisCare’s net leverage has hit 13x after jumping by three turns during the group’s second quarter, ending December 2021, as the firm’s U.S. business derailed earnings and its cashburn continued despite a chunky working capital release and the receipt of further sale-and-leaseback proceeds, sources told Reorg. » Continue Reading
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