Dive Summary:
- Distressed investors are buying portions of UK based waste management company Biffa's outstanding loans in an effort to gain control of the company in a debt-to-equity swap.
- Reuters reports that on bank sold a 13 million pound portion of Biffa senior debt at a 59% discount from face value. Other trading desks have reported similar interest in the company.
- The private equity owners of Biffa have $1.7 billion in debt that they not expected to be able to repay. Barring a last minute sale, it is expected that lenders will take control of Biffa when the owners default on the loans. The company has been hurt by falling recycling prices and lower waste volumes.
- Biffa had previously received an $814 million purchase bid from a US consortium lead by Chinook Sciences. The company's owners are expected to reject the offer. Read previous coverage here.
From the article:
Distressed investors are buying into loans of UK waste management firm Biffa as they attempt to take control of the company, which is restructuring its 1.1 billion pounds ($1.7 billion) of debt, banking sources said.
One bank sold a 13 million pound piece of Biffa senior loans at 59 percent of face value on Tuesday, traders said. Trading desks received further calls on Wednesday to trade more Biffa loans as distressed investors seek to build a stake in the business' debt, the traders added.
