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Winding Up is 9fin's weekly newsletter, incorporating summaries and commentary from our European distressed coverage for the past week. Find out more about what we do for distressed here.

Little by little Kloeckner Pentaplast’s secured creditors are garnering signatures for a co-op across its $725m TLB, €600m TLB and €400m SSNs all maturing in 2026. That makes it the fifth such instance of a co-op in Europe this year (six, if you count the reconciliation between the Gallagher brothers).

Kloeckner’s creditors are gearing up for a possible liability management exercise as they are doubtful a straight refinancing is possible. The group is hosting its Q2 24 earnings call at 2pm BST today (webcast is here). Creditors in Altice France, Ardagh, iQera and Intrum have all acquiesced to co-op agreements this year, but will this trend live forever?

There are rumblings of discontent between creditors in some of these groups. It’s not quite creditor-on-creditor violence (or brother-on-brother violence as the Gallaghers might attest to), but it does suggest some unions are built on rocky ground.

In macro news, hopes are rising for European Central Bank rate cuts next month after Eurostat revealed today (30 August) that inflation in the Eurozone is expected to be 2.2% in August 2024, down from 2.6% in July.

We were ahead of the game here on home soil with the Bank of England cutting the base rate by 0.25 percentage points, to 5% at the start of the month. The housing market in the UK has already been recovering ahead of this, with mortgage approvals rising to the highest they’ve been since November 2022. House prices have started to roll with it, rising this month to 2.4% compared to 2.1% in July, according to Nationwide.

If we cast our eyes back to late 2022, that’s when former UK Prime Minister Liz Truss unleashed her disastrous mini-budget. Truss tweeted last Friday that the masterplan was a Bank of England “inside job”. We’ll let you be the judge of that one…

Elsewhere in the news this week the CEO and founder of Telegram was arrested in France amid investigations that the messaging platform was being used for illicit activities. The arrest caused the price of the group’s convertible bonds to slide away around 11 points on Monday (26 August).

Sound Point Capital Management was also in trouble with its regulator. It has agreed to pay a $1.8m civil penalty as it settled an enforcement action with the US Securities & Exchange Commission, over “failing to establish, maintain, and enforce written policies and procedures reasonably designed to prevent the misuse of material non-public information,” while trading CLOs.

9fin has been covering Q2 earnings at supersonic speed for issuers who are scrambling to get their earnings out before the season ends. We get stuck into Lowell, Altice International Oriflame, SBB and Kloeckner Pentaplast (later this afternoon). We continue to get the down low on private earnings as well with Foundever and KronosNet.

Altice France — The distressed telco provided few updates on its Q2 24 call this week which lasted under 10 minutes without a Q&A session. Management briefly touched on results, which continue to decline with EBITDA down 7.5% YoY.

Altice International — After selling its first asset since announcing its strategic review and Altice France’s ultimatum, listeners on yesterday’s (29 August) Q2 24 call were keen to hear how the telco would apply the Teads sale proceeds. It’s fair to say management was slightly ambiguous, find our earnings review on the 9fin platform.

Arxada — Arxada's Q2 24 earnings report, released last week, shows an improvement in quarterly EBITDA. However, the continued reliance on its revolving credit facility indicates that cash flows haven’t been able to cover capex and finance cost payments. Therefore, deleveraging to a sustainable leverage ratio may not be easy. 9fin published its deep dive on the Swiss specialty chemicals manufacturer here.

Cineworld — An English court has on Wednesday (28 August) allowed Cineworld to convene its creditors in 15 separate classes for the purposes of voting on four restructuring plans related to its UK group, which would reduce its lease liabilities and extend the term of its term loan liabilities.

Foundever — Customer services company Foundever (also known as Sitel) has reported poor results for Q2 24, continuing a downward trajectory the company has been on since 2023. The results come as Foundever is struggling to adapt its business model to the threat of artificial intelligence, which is impacting multiple client management and outsourcing companies.

Intrum — the Swedish debt collector announced it had reached the required 66.7% threshold for a bondholder lockup agreement to refi its debt but it’s unclear which jurisdictional country the company could have to file an in court restructuring in if more bondholders don’t sign on.

Kloeckner Pentaplast — the German plastic packager’s secured creditors are forming a co-op, sources close told 9fin. In order for a co-op agreement to be effective it would have to be signed by over 50% of the holders of each instrument. So far a majority of the USD tranche of the TLB has signed up, the sources said.

KronosNet — the Spain-based customer experience (CX) firm reported mild Q2 24 earnings last week, 9fin sources said, as the CX industry fights against a booming generative AI (GenAI) alternative. YTD Q2 24 EBITDA jumped 5% YoY to €129m, lagging only 1.5% behind budget, lenders told 9fin. YTD Q2 24 revenues of €1bn were flat on last year and 1.5% ahead of budget.

Lowell — The UK-based debt purchaser’s management remained bullish on NPL opportunities in its UK and Nordic regions on a 29 August investor call, while shunning investments in its DACH region, as those markets were yet to reprice investments to better reflect “cost of capital and risk”.

Medical Properties Trust — MPT’s largest tenant, Steward Health Care sold two of its Massachusetts hospitals for a net allocation of only $1 in its chapter 11 scheme with the bulk of the offer proceeds going to Apollo, which foreclosed on some MPT properties this month. Additional sales in the state could lead to less than $10m going to Steward’s FILO lenders after the distressed operator could not find viable bids and the state had to gift a temporary bridge loan.

Oriflame — The Swedish direct beauty selling company has become the next borrower to engage in liability management exercises. Alongside Q2 earnings released on Thursday (29 August), the group declared it had designated some restricted subsidiaries as unrestricted, and is “evaluating potential recapitalisation opportunities”. Additionally, the report says the company is “in active discussion to raise financing on the assets”.

SBB — Sweden’s largest real estate company’s Q2 24 results showed it was stemming off losses and will gain some short term liquidity in Q3. It also hinted that its big plan to spin off its residential properties into an IPO to cover its looming debt wall might not happen.

Telegram — The messaging app’s convertible bonds took a big price swing down after private wealth funds rushed to exit the company following news its CEO was arrested in France for being complicit in aiding sales of illegal contraband. Hedge Funds rushed in to buy on the dip but access to its private financials are scarce.

30 August — Intrum restructuring deal reaches an implementation threshold (9fin)

29 August — Steward agrees to sale of four hospitals, with implied price tag as low as $1 (9fin)

29 August — Oriflame designates subsidiaries as unrestricted (9fin)

29 August — SBB losses shrink but residential IPO in question — Q2 24 earnings review (9fin)

29 August — Foundever slips again in Q2 but loans stand firm (9fin)

29 August — Altice International takes ambiguous stance on Teads proceeds (9fin)

29 August — Lowell sours on DACH investments — Q2 earnings review (9fin)

28 August — Kloeckner Pentaplast secured creditors to package co-op (9fin)

28 August — Cineworld gets court approval to hold creditor vote on plans (9fin)

28 August — Steward’s use of captive insurers reroutes medical malpractice claims (9fin)

27 August — Sound Point pays penalty over CLO trades linked to handling of non-public information (9fin)

27 August — Telegram bond trades down after CEO arrest (9fin)

23 August — Steward threatens to close Pennsylvania hospital if not ‘gifted’ $1.5m by today (9fin)

23 August — Arxada glimpses EBITDA growth amid deleveraging need — Q2 24 earnings review (9fin)

23 August — Traders kept in suspense on Atos, Avon, Intrum and Telecom Italia CDS outcomes (9fin)

23 August — Petrofac gets another standstill extension, but should it change tack? (9fin)

23 August — KronosNet claws back Q2 24 as CX firms fight AI headlines (9fin)

On Wednesday (28 August) Milbank announced that Ian Wallace is joining its London office as a partner in the financial restructuring group. He spent the last nine years at White & Case and before that over a decade at Freshfields. His nearly 20 years’ experience of leading restructuring advisory includes acting for debtor-side corporates and financial sponsors as well as a wide range of sophisticated creditors, including banks, funds, and noteholders.

On Tuesday (27 August) Kirkland & Ellis announced that Dr. Christian Halàsz and Friedrich Schlott will join the firm as partners in the restructuring practice in both Munich and Frankfurt. Both partners were previously at Gleiss Lutz.

Top bond movers (link to full screener on the 9fin platform)

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