Summit Notebook

Exclusive outtakes from industry leaders

from DealZone:

Diamonds in the rough

Diamond pictureSomewhere out there are ailing companies in need of a turnaround specialist. These experts -- also known as company doctors -- parachute into troubled businesses to turn their business around.

Funds, such as Oaktree Capital, HIG Capital and Apollo Management, specialise in buying up companies in distress (either through buying equity or debt) and turning them round.

And this should be a great time for these investors -- banks are loaded with stakes in troubled companies and unwieldy corporates may want to spin off unwanted businesses.

But banks are not playing ball. They want to wait until the economy recovers and sale values rise. So few companies are up for sale. But the funds want bank sales of stakes to accelerate otherwise it might be too late to turn these companies around.

Restructuring calls heat up

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After a cool few months, the phones are heating up again for restructuring advisors. 

Michael Kramer, head of restructuring at Perella Weinberg Partners, told the Reuters Restructuring Summit that the calls he gets from possible clients aren’t quite as panicked as early this year. 

Zombie companies

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In zombie films, the dead walk the earth and slowly annihilate the living. Such a frightening prospect may be in store for Europe, the Reuters Restructuring Summit was told.

Banks are one of the big problems, speakers said, as they are unwilling to take the size of write-downs necessary to cut firms’ debts down to a manageable size.

from Funds Hub:

A “remote, silent whirlwind”?

We may have just lived through the biggest financial crisis in 80 years, but its impact may still not have been big enough for people to learn the right lessons for next time.

rtr1t6liPhilip Wood, special global counsel at Allen & Overy, told today's Reuters Restructuring Summit in London's Canary Wharf that the effects on the Western world's populace of the credit crisis, while large, have simply not reached the proportions of 80 years ago.

from LEGACY Reuters Summits:

More sovereign bond issues, more challenging for corporates?

Analysts say the worst of the financial crisis that hit Eastern Europe especially hard has passed but new euro bond and sovereign bond issues could make it challenging for corporations looking to tap the capital markets. Cheuvreux's Simon Quijano-Evans explains why.

Impact of new sovereign bond issues from Reuters TV on Vimeo.

Tinkering whilst debt burns

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What have Liverpool Football Club, French building materials firm Materis and German forklift truck maker Kion got in common?

They have all been beneficiaries of European banks’ preference to tinker with company balance sheets rather than fundamentally restructure indebted businesses, one speaker said at this week’s restructuring summit.

“Rich, retired and gone”

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Veteran insolvency expert Nick Hood gave the restructuring summit a sobering reminder of the shortcomings of corporate finance.

“Every time we have a recession I sit down with the head of workout for bank clients and ask what banks are going to learn,” said Hood, who first qualified as an accountant in 1970.

Debt collecting gets…er, sexy?

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Bank employees working in call centers and reminding clients of their overdue loans used to be as far to the bottom of the banking food chain as you could be. Not any more.

Raiffeisen International, the second-biggest lender in eastern Europe, has ramped up staff in its collections and risk management departments.

Stop lumping us together! say Central Europeans

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An invitation to the Reuters Central European Investment Summit may sound perfectly acceptable to many policy makers and executives but not to Czech central banker Mojmir Hampl. It’s not that he objected to visiting our Vienna office and being interviewed by a crew of editors — Hampl was ready and willing to do that. He just questioned the very idea of lumping together all the different countries in a very diverse region.

 

“I’m a bit disappointed that the key topic is how the Central and Eastern European region will develop,” Hampl told us, reviving a complaint often heard around the region. It’s a serious issue, one that has bothered many policy makers in central European countries, who grew frustrated at the height of the financial crisis that investors were not differentiating between those with sound fundamentals such as the Czech Republic and Poland and those on decidedly shakier ground.

from Funds Hub:

The morgue after Christmas

Around this Christmastide banks will begin to take a strict approach to companies running out of money, according to Simon Davies, managing director of The Blackstone Group.  

 

 

He said at the Reuters Restructuring Summit in London that by the end of the year banks will issue "in patient", "out patient" or "morgue" judgements as they go about the business to decide who gets much needed loans and who does not.

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