(Reuters) - Intrum, Europe's biggest debt collector, on Friday said it had filed for Chapter 11 bankruptcy in the United States in a bid to restructure its debt.
The company has struggled as the pandemic, an energy crisis and two-decade-high interest rates failed to unleash a wave of loan defaults, with concerns mounting over Intrum's net debt, which reached 49.4 billion Swedish crowns ($4.49 billion) at the end of September.
Intrum, which last month announced plans to file for the Chapter 11 protection, listed assets and liabilities in the range of $1 billion to $10 billion and estimated its number of creditors in the range of 1,000 to 5,000, according to a court filing.
"Today, with support from the overwhelming majority of our key stakeholders, we are making significant progress towards the implementation of our recapitalisation transaction," said Intrum CEO Andres Rubio.
Intrum had won support for a debt restructuring from 73% of its noteholders, enough for a U.S. Chapter 11 procedure but short of the 75% needed to qualify for a simpler process under English law or a 90% threshold for an all-voluntary process.
The company said it plans to continue to operate as normal with no disruption to its services and that it has sufficient liquidity to continue operations and execute its business plan throughout the Chapter 11 case.
The company said it would remain in possession and control of its assets, retain its existing management team and board of directors during the bankruptcy proceedings.
The move by Intrum comes at a time when the debt collection industry in Europe faces challenges, with a significant decline in non-performing loans diminishing the volume of business available for these companies.
Intrum, which expects to complete its Chapter 11 proceedings before year-end, also plans to execute a Swedish company reorganisation during the first quarter of 2025, it said on Friday.
($1 = 10.9958 Swedish crowns)