British car cleaning firm IMO Car Wash is struggling with more than 350 million pounds of debt, and some detractors say demand for its services drops each time it rains. As such, the value of the company is almost as changeable as a British summer.
This is a headache for both its private equity owner and lenders, who have been trying to settle a restructuring of IMO’s finances since the start of the year. Disputes over valuations have sparked a battle between different groups of lenders, with the result set to be decided in a London court on Monday.
The court case has wider ramifications for European restructurings, as I wrote earlier, because the case is likely to set the tone for many restructurings to come.
Senior lenders hope to be able to clear out junior creditors from the list of borrowers if the value of the company falls below the amount of senior debt owed. The seniors think they have done enough to prove the value of the company is less than their debt; the junior lenders disagree.