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Tom Kavanagh kavanaghfennell

CORPORATE RESTRUCTURING SUMMIT. Tom Kavanagh kavanaghfennell. 25th September 2013. Contents. Trends & Developments Large Property Sales IBRC Debt Restructuring Personal Insolvency Outlook for the next 12 months. www.insolvencyjournal.ie . Year on year decrease of 20%.

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Tom Kavanagh kavanaghfennell

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  1. CORPORATE RESTRUCTURING SUMMIT Tom Kavanagh kavanaghfennell 25th September 2013

  2. Contents • Trends & Developments • Large Property Sales • IBRC • Debt Restructuring • Personal Insolvency • Outlook for the next 12 months

  3. www.insolvencyjournal.ie Year on year decrease of 20% Year on year decrease of 14% Predicted 2013 total: 1,300+ 2012 overall total: 1,684 *statistics do not include personal asset receivership

  4. Trends & Developments • Receiverships – Differing strategies • Examinership – B&Q, Pamela Scott, Sunday Business Post, Barna Waste • IBRC Liquidation • Portfolio Sales – Aspen, River, IBRC, Ulysses, Arc, O’Flynn • Servicing Contracts – Certus, Capita, Pepper • PE firms, REITs + QIFs • Spike in Fixed Asset enforcement • Charles Allen ‘Trust’

  5. Large Property Sales • Treasury Portfolio - €306m • Clancy Quay- €82m • Vet College- €22m • Gemini Portfolio- €65m • Bishops Square- €65m • River Island Building - €40m • La Touche House- €35m • 4 Apartment Blocks- Capreit - €42m • Marker, Ritz Carlton, Burlington , Trinity Plaza

  6. IBRC • Debtor purchase, PE firms or NAMA • Valuation is the key • Debtors – No certainty on banking counterparty • Further uncertainty for trading businesses • INBS book - NAMA?

  7. Debt Restructuring Borrower Perspective • Private Equity • Exiting Banks • Pillar Banks • Loan Service Providers • Debt Collection Agencies Bank’s Perspective • Long-term market participants • Capital Efficiency • Restructure is easier on balance sheet • Future interest income

  8. Debt Restructuring The Return of Capital • Dublin awash with hungry money • Provides Banks with option of taking market • Exiting Banks / Bad Bank run offs / NAMA • Vendor appetite for portfolio sales Models • Senior Debt profile structured around free cashflow • Residual debt: • Stretch and forgive, equity fee notes, zero coupon parking • Margin debate (higher senior debt v interest rate return) • i.e. €5m @ 4% margin = €5.73m @ 2%

  9. Debt Restructuring Issues and Obstacles • Family Homes • Documentation and Fulfilment • Provisioning inadequacy • Borrower fatigue • Contagion fear

  10. Personal Insolvency • Insolvency Service of Ireland • Formal Arrangements - Banks not favourable? • Borrowers left with Hobson’s choice • Consensual restructuring or Bankruptcy • Exception – multi banked borrowers

  11. Outlook For Next 12 Months • Higher volume of asset sales • Portfolio Sales to pick up • IBRC outcome • Restructuring – real progress • Surge in Fixed Asset enforcement • Examinership ‘Light’ • Personal Insolvency – fall out • Sentiment – inching forward

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