DealZone

Investing in a company in trouble is rarely for the faint-hearted, as the funds lending to Eggborough power station know.

Earlier today France's EDF, Eggborough's current owner, confirmed lenders to the coal-fired power station planned to exercise their option to buy the Yorkshire plant for about 190 million pounds.

The lenders, which include Bluebay Value Recovery Fund, took on the debt following an earlier restructuring of the company. Reports suggest that despite the low acquisition price, Eggborough may be worth as much as a billion pounds.

Other unusual results of distressed investing recently include Octavian Advisors ending up on the board of sporting goods firm Head NV, mezzanine lenders landing up in a big London restructuring court case, and Vinci buying up bits of British builder Haymills via a prepack deal.

After three days of hearings in a cramped courtroom at London’s Royal Courts of Justice, when the judge “blessed” lenders’ plan to take control of British car cleaning firm IMO Car Wash.

As I wrote earlier, this rare moment in the sunshine for Europe’s largest car-cleaning firm came as low-ranked junior lenders failed in their attempt to block senior creditors’ plans to take over the company as part of a debt restructuring.

On the first day of the hearings I counted no fewer than 72 people in the court as London’s distressed-debt and restructuring community queued to listen to the arguments in this landmark case. One day I ended up sitting on the floor of the courtroom next to one of London’s financial elite listening to lawyers putting forward complex legal arguments about valuation methodologies.

With the market talking of green shoots, it seems only a matter of time before the predators of the private equity world begin stalking the market again. Simon Meads and I took a look at the issue earlier today.

We found that though many private equity houses are still licking the wounds inflicted by ill-judged boom year deals, others remain keen and ready to go. Many of these firms timed it just right, either raising funds late in the credit cycle or selling companies at the top of the market.

Private equity companies in a good position include Advent International, Bridgepoint, CVC, Charterhouse, Cinven, PAI and Warburg Pincus.

Embattled Cerberus Capital Management, a private-equity firm named for the mythological three-headed dog that guards the gates of Hades, has been overwhelmed by clients seeking to withdraw money from its $2 billion hedge fund, Cerberus Partners.

Website FINAlternatives said that fund investors representing 17 percent of the assets wanted to withdraw their money in December, the most recent month for which statistics are available. Now, with Cerberus's investments in Chrysler and GMAC going bad and unemployed investors needing to tap more funds, that figure may be heading higher.

Now, according to this Bloomberg report, Cerberus sent a letter to clients warning them that it could take "years" to meet all the redemption requests, which have stacked up since the firm imposed gates in December.