DealZone

Deals du Jour

New European regulations made headlines on Tuesday as the former chief executive of Man Group hit out at proposed changes to hedge fund rules and the first details of new European bank regulations emerged.

Other stories to make the newspapers include:

* Bondholders to Northern Rock, the UK bank rescued by the state, are being repaid ahead of the British government due to a contract breach in 2008, the Guardian reported.

* London Residential Opportunities, a new residential property fund, is looking to raise 50 million pounds ($81.16 million) in equity ahead of floating on the London Stock Exchange later this year, according to the Daily Telegraph.

* Preparations are being made to put Independent News & Media (INNZF.PK) into examinership — an Irish form of bankruptcy protection — in case restructuring talks fail, the Times reported.

* China’s state-owned Beijing Automotive faces long odds in its bid to buy European carmaker Opel due to Chinese reluctance to buy foreign auto firms, according to influential Chinese magazine Caijing.

Wrestling for control

wrestleDespite objections, and a rival bid from PAI Partners, a group of three distressed debt investors proved successful in their aggressive bid to wrestle control of French roofing company Monier through a debt for equity swap.

The restructuring deal sees Monier’s 1.9 billion euro debt load halved in exchange for senior lenders taking full ownership of the firm.

Previous owner PAI had its fingers prised from a prized asset through a combination of its rivals’ tight focus and a collapse in Monier’s earnings, which helped propel lenders into the driving seat.

Less is more for ITV

itvFaced with big debts and falling revenues, companies across the world are hiring experts and pondering options.

One option is to swap old bonds for new, exchanging looming maturities for redemptions a few years off. Another is to buy back debts trading at discounted prices.

UK broadcaster ITV (ITV.L) is the latest company to swap its bonds, one of the most successful of a string of exchanges Reuters predicted back in April.

What is an asset worth if no-one wants to buy?

car-washValuation issues mean extra work for financial advisers as they try to restructure the debts of struggling European companies.

With few bidders for companies — as specialist distressed investors continue to sit on their hands — many company valuations are “subjective”, one restructuring expert told me earlier today.

Such uncertainties have serious consequences. An argument has broken out between different groups of creditors to car cleaning firm IMO Car Wash, as senior lenders seek to take control of the company via a debt-for-equity swap.

Wings clipped

The first China-assembled Airbus A320 aircraft lands at the Tianjin Binhai International Airport after a test flight in Tianjing MunicipalityThe sale of BAA-owned airport Gatwick has been beset by delays and difficulties. Another cloud on the horizon might be government plans to launch a new regulatory regime for big UK airports.

BAA today complained that proposals to introduce a “special administration regime” for London’s Heathrow, Gatwick and Stansted would create additional uncertainty for investors and drive up the cost of airport finance.

The Department for Transport is considering introducing such a regime to safeguard operations if an airport operator goes bust. Similar schemes already exist for power and water supplies.

Heineken brews up loan-to-own deal

Distressed debt investors seek to pick out the diamonds in the rough, the good companies that can be turned around given a fair wind and the right management and capital structure.

These specialist investors buy up the debt of struggling companies aiming either to sell on the debt when the company recovers, or grab an equity stake if the company is forced to cut its borrowing via a debt-for-equity swap.

Stepping into this territory is Dutch brewer Heineken, which has bought up 49 percent of the debt of Globe Pub Company, a UK pub chain owned by property entrepreneur Robert Tchenguiz.

Situations vacant

Job seekers queue for jobs posted in Makati's financial district of ManilaNew opportunities for ex-bankers are few and far between. However, one area of the financial industry continues to grow: restructuring.

Like the credit boom turned on its head, restructuring deals help lower companies’ debt before it drags them into insolvency. Deleveraging is the awkward word the industry uses and it offers opportunities right across the financial services business.

As I wrote in February, the big investment banks see restructuring as a great chance to restart relationships with indebted corporate clients, and are willing to go head-to-head with well-established boutique advisory firms for lucrative advisory mandates. JP Morgan, Credit Suisse and Morgan Stanley have all made high-profile hires in London.

Back from the dead?

French and German Military surgeons perform abdominal surgery on an Afghan civilian patient at the French Military Hospital in KabulChrysler’s troubles looked so great even its own executives thought the company was headed for liquidation, however emergency surgery in the bankruptcy courts appears to have saved the patient.

As Caroline Humer and Tom Hals write, the sale of Chrysler’s main business to Italy’s Fiat and other groups looks likely to be sealed by the end of May, taking most of the company out of bankruptcy within just 30 days, hitting the government’s target deadline.

Judge Arthur Gonzalez has been instrumental in driving through the process, quickly rejecting objections from a range of creditors. A few sticking points could still hold up the sale, with a group of Indiana pension funds filing suit in a separate court, but most specialists expect the judge to approve the sale to Fiat at Wednesday’s hearing.

Better late than never?

A giant sculpture constructed with the faces of clocks is seen outside a Paris train station

Is now the time to be bulking up in M&A and other kinds of corporate finance advice?

On Monday, Societe Generale trumpeted the hire of a top French dealmaker from JPMorgan — the auspiciously named Thierry d’Argent — and reiterated its big plans for European M&A. Daiwa Securities SMBC agreed to buy mid-market corporate finance house Close Brothers Corporate Finance. Meanwhile Barclays Capital is making lots of equity markets hires, and says it aims to be one of the world’s top full-service investment banks.

As I wrote:

“A clutch of banks with previously limited reach in European takeovers and other corporate advisory work are betting now is a good time to grab market share — before the dealmaking business recovers.

Timing is everything, private equity finds

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.