Intrum AB (publ) (INTRUM) Earnings Call Transcript & Summary

Hi, everyone, and a warm welcome to this webinar, where we have the pleasure to have Mr. Andres Rubio, the President and CEO of Intrum here joining us for a market update on the ongoing recapitalization process. My name is Rickard Hellman, and I'm heading up the credit research department here at Nordea. I'm also the analyst covering the debt collector sector and has been doing so for the last 11 years. I am soon to hand over to Andres for a short introduction and a recap of the process. Thereafter, we will have a discussion based on questions that you have provided to us in advance. But if you have any further questions, please use the question function in the system that you are viewing in this webinar, and we will address them after the presentation. So the thought here is that we will listen to Andres for a short introduction. And thereafter, we will have a discussion. So with that said, I'll hand over to you.

Thank you very much, Rickard, and good afternoon, everyone. First off, I'd like to thank Nordea and you specifically, Rickard, for hosting today, also for serving as an independent moderator to ensure that we get all the proper questions from investors that have been submitted. I think it's important from my perspective and from the company's perspective, given that this process has been going on since early last year, as well as it's not a standard process, and it's now gone on for over a year, that we level set the information regarding the process. I've noticed recently in talking to certain investors, I've also noticed in some media reports, particularly here in Sweden, there is both some lacking of information of accurate information and some misinformation. So I thought it was very, very useful today to focus on the recapitalization to go through some facts and I'll only do that for 5 or 10 minutes and then hand it over back to you, Rickard, because I think the most important thing is to field investor questions and clarify any doubts that they might have. So with that, I will turn over to a very brief presentation on the recapitalization. And this is really a recap of the events over the last year to give a complete, but summarized version of the events that have led us to where we are today and a little bit of discussion as to where we can expect to go forward through completion of this process. So the first phase, which really dates back to almost a year ago is characterized by what I would say is severe deteriorating market conditions. Specifically, at the outset, during the first quarter, we saw our stock price decline from SEK 73 down to SEK 15. It dropped 50% into February and then a further 30% into March, which was that SEK 15 downturn. So we had a significant downward correction in our stock price. And all our bonds started trading at significant discounts with some trading as low as half or 50% of par. So we entered the year, and we experienced this significant negative market deterioration in -- regarding the company. In line with that, the rating agencies from -- throughout the first half of last year have consistently downgraded us across the board, S&P, Moody's and Fitch. And they've reached -- as is typical when companies approach a recapitalization, they reached as low as single C or equivalent in the other -- for the other rating agencies. So in the first half of last year, given the severe market downturn, we were effectively faced with no market access. And as everyone knows, historically, the company has had a very large balance sheet that primarily funded portfolio acquisitions and company acquisitions and by definition, required some level of ongoing market access to maintain that level of debt. Where we were in the first half of last year was effectively given the trading levels, no market access and a significant amount of maturities and through '24, '25 and January of 2026 which is when our RCF revolving credit facility, which is our largest debt interest instrument matured, we faced over SEK 35 billion of debt maturities. So what did we do? We took, I believe, the responsible step and hired global leading advisers to evaluate our options, specifically on the financial side, Houlihan Lokey; and then on the legal side, Millbank. So that is really the first phase of this process, where facing this market downturn, we took the step to evaluate our options with the benefit of professional advice. The second phase, which really began more in May, June, July, and led up until the fall is where we proactively approached our creditors after having evaluated our options, to look for a solution. We engaged with our creditors, as many of you know and has been widely reported, 2 principal bondholder groups emerged, one group, which I'll call the Short-end group, principally holding 2024 and 2025 bonds. The Long-end group is the other group that emerged. They held bonds throughout the full spectrum of our maturities from '25 through 2028. During these 2 plus months, we very actively engaged with both parties to try to find a solution that could capture the greatest amount of creditors and be a solution that was workable for the company. Ultimately, we decided to engage with one of the 2 groups. But during this time frame, it is very important to note that we negotiated and entered into discussions with both groups concurrently trying to find a global solution. We actually spent significant amount of money on our legal advisers and paid for both groups legal advisers, that is the responsibility of a company in a recapitalization. And ultimately, got to the end and decided on what today is a recapitalization. Concurrent with those discussions, we engage with our RCF banks, which are 13 banks, led by a smaller group, a SteerCo, of predominantly Nordic banks and engaged concurrently with them in discussions about what might be this possible solution, which would have to be agreed by all creditors. In July, we announced and many of you are obviously well aware a Lock Up Agreement with effectively the Long-end group. This Long-end group, I think, led to the recapitalization that we have before us today. It really had 2 elements that were attractive to us. It addressed the entire capital structure, not just the '25s and it afforded the company an opportunity to immediately delever and subsequently delever in the form of buybacks, immediately delever in a small discount to the debt in the exchange. And ultimately, follow-up discount realized through the repurchase of bonds, should they be trading at a discount post effective date. This had the overwhelming support of creditors. 73% of bondholders by value signed that Lock Up agreement by the end of the consent period, which was in September. So again, comprehensive entire capital structure allowed for deleveraging and overwhelming support to the bondholders. About a month later, a little bit less, we reached a similar agreement on this recapitalization with 97% of the banks of the 13 banks all but one agreed to the recapitalization and committed themselves to support the recapitalization. And that was in August. And what we did subsequent to that is we repaid the 2024 maturities at par, why? Because we had not yet entered into a formal process. This period is really an evaluation period for where we could best implement the recapitalization. We evaluated 3 options, Chapter 11 in the United States, scheme of arrangement in the U.K. and Swedish reorganization. And because by October, we had not yet entered into any one of them, we repaid our maturities at par as we are obligated to do so, which put further pressure on the liquidity of the company to make sure that we affected a recapitalization post those repayments. Then where are we post this period? We have been successful in the U.S. We've initiated our process in Sweden and all of this is despite formal opposition from a small minority. So in November, we formally filed a prepackaged, i.e. pre-agreed Chapter 11 in the United States. Our support when we asked them to specifically vote on the Chapter 11 as the first step of our recapitalization. We got even greater support, 100% of the RCF banks who voted in favor, 82% of the bondholders who voted in favor. The Short-end group, the broader Short-end group, which held about SEK 500 million of debt in totality at the beginning, which is in the context of almost SEK 5 billion of total debt and held about 10% of total debt and about 15% of bonds voted against, which is entirely within their rights as creditors and a smaller subset that held only a little bit more than half of their holdings, about a little bit more than SEK 250 million, SEK 270 million or so based on our latest figures, initiated formal legal opposition in the United States. Subsequent to that, in December, specifically December 31, New Year's Eve, the judge came back with his decision in the United States and dismissed or denied, excuse me, the motion to dismiss it had been brought by the dissenting group and fully confirmed our Chapter 11 plan. So it was a thorough decision and a definitive decision in favor of our recapitalization, which had overwhelming support, as I said earlier. Now where are we now? We have applied as of 1.5 weeks ago or so, I believe, for a Swedish company reorganization. This is the second and final step in our implementation of our recapitalization. It is important to note that it is not connected to Chapter 11, it is completely separate from Chapter 11. The Swedish District Court, the Stockholm District Court, the Swedish court has to come to their own decision on the benefits of our reorganization and on the validity of our reorganization, an even smaller subset of the Short-end group than opposed us in the U.S., 1 or 2 less parties, I believe is appealing that decision in the Swedish court to accept our application for a company of reorganization, and the group in the U.S. has appealed the Chapter 11. There was -- I'm sure some question as to -- I'm sure there are some questions that you're going to ask me, Rickard, about what's next steps and what do creditors have to do? And when is this all over. So the next step is that there will be a creditor vote. It will probably end up being in the first half of March depending upon the subsequent events. And I'll just remind everyone that at that vote, similar to the vote on Chapter 11, all the locked-up creditors are legally committed to vote in favor of our plan. And this is all going to be resolved and concluded, and we can emerge from this sometime in the first half. I say the first half, but it will likely happen sometime during the second quarter of this coming year. So all this is, is a recap of the events as to where we are now. Hopefully, this level sets everyone's information set that are listening as to the facts around the process and where we are. And now much more important, we can switch over to you, Rickard, and you can ask me questions because it's the most important part of this is to make sure we answer directly and clearly as far as I can, given the circumstances, all the questions that investors have.

Sure. And thank you, Andres, for your presentation. [Operator Instructions] There has been a lot of question around the process and especially about the choice of Chapter 11. Could you start just giving a little bit of a rationale behind your choice? Why did you go that route?

A very good question. So as I said earlier, we evaluated 3 alternatives, Chapter 11, Scheme of Arrangement and Swedish Reorganization. We settled and agreed with our partners in this transaction, the RCF banks and the bondholders who signed the Lock Up agreement to start with Chapter 11. Why? Chapter 11 and the bankruptcy court in the United States has a very long history of case law. It is probably on the planet, the most efficient and the most thorough and the most reliable court for these type of recapitalizations. And ultimately, that proved to be true because from the entrance on November 15 to the decision on December 31, we were literally in and out of the process with a completely thorough evaluation of the fact despite the dissenting group and a decision supporting the recapitalization. So that is the first step, but we were always -- and we've always agreed with our creditors to do Chapter 11 first, and then do a Swedish company reorganization. It is what many other companies have done recently that have done the same thing, U.S. than Sweden. It is important to note that we chose that because we want that -- we want the Swedish court to have an independent review of all the facts and to then give full effect to the decision in Chapter 11 in Sweden. And that is the final step, as I said earlier. And with that, we will complete our recapitalization and go effective.

And that's where you are now.

Correct. Correct.

Yes. And I mean, as you've been very clear about that the Swedish process must be successful for your case in the circumstances to move forward.

It is the final step. It is what we've agreed obviously, sitting here as a CEO with the plan as we put it forward with the overwhelming support and with at least an independent decision that's favorable in the U.S., I am confident that when the Swedish court goes through the full analysis of the facts that they will also support the plan, but that has yet to be determined. That has to play out. We await a positive decision there.

Yes. But I guess there are ways for this process to be delayed and there's also ways of trying to not also stop the process in that sense. Just -- I mean, could it start with the delays? Could it be delayed in any way, not just a week or something, but stretching? Yes. I mean after summer.

No, no, it's a very good question. I painted the picture that the U.S. was super-efficient. That's not to say that Sweden is not efficient, to be very clear. The Swedish Court has a very definitive process laid out. And if it's delayed, I believe my legal advisers have said to me that it will be delayed by a question of a few weeks, it cannot be extensively extended, to be clear. We have an agreement also with our locked-up creditors through May or June, if I don't recall correctly, to continue to pursue a recapitalization so long as we're in a process, it goes to May to June. So we have time to do this, although we'd like to do this as quickly as possible. So it can be extended but my understanding of the process from legal experts in this country that while it's extended, it cannot be extensively delayed.

But it's -- correct me if I'm wrong here, but I think the law is from 2022. So it's a little bit, correct, later [indiscernible] than perhaps Chapter 11...

And by the way, that's one of the reasons that people typically -- that companies typically do this Chapter 11 and Swedish reorganizations. Swedish reorganization law is a very robust regime, as I understand it, given my legal experts, what they told me. But it is relatively recent. It is framed on international bankruptcy law, but that's one of the reasons that people do both processes and require both processes. Now you also asked me, do I require it to complete. And obviously, we expect to have a favorable ruling. But if for whatever reason, we do not, we have to go back to our locked-up creditors with whom we've agreed this recapitalization and think of an alternative.

And does it mean to start over from the beginning?

It does not. It does not. We would still have the benefit to be very clear of the Chapter 11 filing. We would have to figure out a way to make it effective to our entire capital structure.

Yes. Okay. But at least back a little bit to the drawing table in order to...

Not entirely, I would say, because the lion's share of the work has been done, but this is a very important final step, but it's a very important validation step, and we expect to be successful. So I don't want to entertain too many scenarios where it's not.

I see. I see. One thing that I mean, there's been a lot of different numbers for the support from bondholders. And I think you efficiently showed the reason why the support jumped from 73 to suddenly 82, I mean more of the numbers of actually voting? But also the consent for amendment of the terms in the MTN bonds were not fully successful in all tranches.

That is correct. I mean we have sufficient numbers to affect the recapitalization. The vote that we did back in, I believe, is October was to make a newly formed entity, a guarantor for MTN, 3 out of 4 were successful. One was not because there was a single holder who was not in favor of the transaction. It's a very small tranche. I think it's SEK 400 million and one entity held 75% of it. But despite all those, we have sufficient numbers to move forward.

Yes. Okay. But you are able, even though you have -- do not have the changed amendment in that tranche to move forward?

Yes, we are. We are. And it's important to note the Swedish reorganization is regarding all creditors, to be clear. It's not just -- there's some -- some investors are thinking that this process only governs the MTNs. No, it governs all creditors. All creditors have standing in this process here in Sweden.

And I mean, this has been at least from my point of view, a complicated process in that sense. And we do get a lot of questions you know about the costs for this. And you mentioned a little bit about the legal cost that you also charge from your side for your counterparties. Can you give any estimates of what this will cost and how much has been charged or will be charged?

Those numbers are not public yet, they will become public. They're very significant. We're talking about tens of millions of euros, but you have to put that regard in context of 2 things. We have SEK 5 billion of debt. So 1% is SEK 50 million. I mean -- so just put that in context, and very easily when you're talking with large creditors who were asking to change terms, et cetera, a 0.5 point to point here or there to make sure that they're incentivized to agree with the recapitalization, et cetera, is can add up to real money. And it is going to add up to a significant amount of money. We also have to put it in the context of how we're going to emerge from this. We're going to emerge from this with a capital structure that is aligned with our plan that gives us time. We're not going to have any major maturities until '27, '28. We can continue to deliver on the business plan and successfully develop our business to reach our -- those maturities successfully. In light of that realignment of our capital structure, which was the main objective of this process and the size of our capital structure, not surprising that it costs money.

I guess I know the answer on this question, but I will ask it anyway because I do receive a lot of questions around. I mean, wouldn't it just be easier to settle with the '25 bondholders? I mean, instead of putting this amount of money on legal fees or whatever?

I mean, again, I don't want to focus too much on the dissenting group because they are, as I said earlier, they are a very small group. I'd like to focus on 100% of my banks and 73% to 80% of my bondholders who are in favor of the recapitalization. And I can't speak to their motivations. You'd have to ask them as to why they're doing this. What I can say about this group is this group opposing the Chapter 11 and then subsequently opposing the Swedish process is a very small group. It is largely made up of global hedge funds. These are not original holders of our debt. Many of our original holders of our debt who stood by the company since the beginning of the issuance and over many issuances are in our locked-up group. This group, we engaged with them when they were part of the short-end group, which is the bigger group, tried to get to a solution. We couldn't get to a solution, as I said earlier, that address the totality of the capital structure and afforded us also a deleveraging, which the recapitalization does. Their descent, and this goes a little bit to the economics of your question, their descent has cost us real money, and they have opposed it formally. They were not successful in the U.S. with the Chapter 11 decision being thorough and completely in our favor. And now they're descending in Sweden. Listen, we're not going to change -- they want us to change the terms of our recapitalization. I don't believe we will do that. And I see us going to the finish line.

I see. And with that said also, I mean, this short-term objectives, I think you put it pretty good. But what is expected by bondholders now in the process? Because there has also been a lot of questions around a little bit in a complicated process for bondholders.

Yes. I mean there's going to be further communication. As I said, the most important step to the -- important next step, which requires actions by creditors will be the vote that will happen most likely sometime in the first half of March. There will be specific communications as to instructions as to how to vote. And there, I would encourage everyone, whether you're in favor of the transaction or not, to put forward your views and your questions and your vote. Remind everyone, and I said this earlier, the locked-up creditors are legally committed to vote in favor of the transaction. I would expect us similar to what happened in the U.S. to even get higher votes in favor.

Yes. Okay. I see. And in that sense, perhaps also would serve a little bit of a technical question is, what will happen with the bonds? To start with -- I mean, you are not paying coupons today on your bonds for, I mean, the process reasons, of course. When will that be settled? And how will those accrued interest be settled?

So again, I may not give you all the perfect technicalities, but in concept, the deferred interest on the bonds, which has not been paid during this process as well as consent fees and other things like that, which are paid in kind, all of that will be settled at the closing date once it is effective, which will be some time in the second quarter after we're done with the Swedish process. And also there's some technical, legal structural conditions precedent that have to be fulfilled. So during the second quarter, when it's closed, deferred interest or accrued interest or however you want to call it, will be paid, consent fee will be paid...

In cash. Will the interest be paid...

The interest is a cash pay, correct. The interest is a cash payment, the consent fees will be in kind. All of that will be settled at closing.

Yes. And then you will also launch in new bonds?

There will be an exchange of old bonds for new bonds correct. And there will be a delivery of shares. That's probably one of the questions as well, and that's part of the package that we're delivering 10% of the company's shares to the bondholders. All of that will happen at the closing date.

Yes. Okay. And that will be based on the nominal amount of the ownership of the bonds?

What do you mean, sorry?

The share distribution?

The share distribution is proportionate to your holdings.

Super. Great. I think if we perhaps move a little bit further, assuming that we are sometime in early Q2, and we have successfully been able to go through this process. Could you just perhaps share and I know it might be repetitive for some division for Intrum in 3 to 5 years?

Of course, of course. And I think, of course, I -- we have earnings announcement next week, so I can't get into any; specific figures, but to give you a general view as to our direction, this is not going to be a surprise to anyone. But we have 2 fundamental businesses. We have servicing where given the environment, there's only a greater demand for our need for services to manage credit on behalf of clients, banks and companies. That business has tremendous momentum. You saw into the last announcement at the end of the third quarter, the margin is improving. Our revenues are improving in key regions. We are doing more for our clients, and that business is going to continue to have positive momentum. On the investing side, we are under a transition. So from a purely proprietary investment business, which used our own balance sheet to fully fund all our investments, to third, predominantly managing third-party capital, that's one of the reasons we sold the back book to raise liquidity, but also become more capital light. That's one of the reasons we entered into the forward-looking partnership with Cerberus, which is off to a great start. I'll give more specifics on that next week. And ultimately, over time, that's going to evolve in managing our own book, but predominantly, the disproportionate amount of capital that we're going to invest is third-party capital. So that third-party capital will bring in fees, will improve our servicing business as well as allow us to play much bigger in the marketplace without having to increase our balance sheet to increase our activity, delinking of the size of our debt balance sheet from the investment activity is a critical element of being capital light and making our business both more profitable, better return on capital and more sustainable. Then the overlay on the 2 businesses is that I want the real opportunity, and when I get really excited about our business is thinking about the potential to incorporate technology. We did 2 technological acquisitions in the last year. One is fundamentally an autonomous debt resolution platform powered by AI, specifically Ophelos and the other one, an invoice management business called [indiscernible] which is particularly relevant in the north and middle of Europe as we deal with companies and so the incorporation in rolling out of both those companies, but in particularly AI, which is a space that's moving, and I know it's a bit of a buzzword, but it's moving so fast. And you think about it, our business, we take a 160 million actions a year. We deal at any point in time with 25 million to 30 million consumers on an individual basis and we help 5 million of them almost a year pay off their debts. We have to deal with individual solutions for small claims on an industrial scale. That -- if you think about that, the application of technology, automation and artificial intelligence into that, be it Agentic AI or other parts of AI has massive potential to transform our business. And none of that impact is in any of our numbers, not our capital markets plan or the plan that underlies the recapitalization. That's what really makes me excited.

Okay. Yes. And I mean, I do agree on the potential. But of course, I mean, we could discuss lengthy about what your [indiscernible].

We should have a separate session on that.

The AI session, perhaps.

Yes.

But I mean, from that point of view, I assume that margins will be a must win for your vision for the servicing business.

Yes, I mean, margins are improving. They've been improving consistently over the last year. They will continue to improve. We have a target, a publicly stated target of 25%. We're on track to hit that.

Great. Because that's also with your plan, when you presented this lockup agreement, you had a little bit of a plan where you thought where you would be. I mean also driving the deleveraging down to 3.5, which will not be in a straight line. But beside the margin development, would you say that you generally are on track?

Well, I think we're on track across the board. Remember that our Capital Markets Day key metrics were revenue -- servicing revenue growth, external servicing revenue growth. We're largely speaking on track. EBITDA -- sorry, EBIT margin in servicing we're on track. The size of our portfolio, we've already brought down the size of our portfolio.

Perhaps even more than the...

Correct. We've even gone more and leverage ratio. The leverage ratio is the one where, over the next few years, it will not be linear, as you said, but it will start declining significantly as we emerge from this process, get into the second half of this year and into next year.

But that also entails that you -- I mean, after this restructuring, you will end up in situation with higher interest paid or higher funding cost at least, not necessarily on an absolute level. But is the plan then try to refinance this product as soon as possible?

Listen, we're focused on emerging from the restructuring to be clear. Let's not get a bit ahead of ourselves. Obviously, as I said earlier, between the time frame that we emerged from the recapitalization, which would be, let's say, by the middle of this year. And our first major maturities in '27, '28, there's a significant amount of time during which we -- our base case is we're going to pay down debt. Should some refinancing opportunity presents itself. Of course, we're going to evaluate it. But today, to be clear, even though the recapitalization program is in the latter stages, our bonds still trade at a discount. So today, there isn't a refinancing opportunity. Will one emerge in the future? We'll see.

Yes. And I guess one key to that is also the rating agency. I mean, bringing them back to some kind of level. Do you have a target for your public rating?

We do not have a specific target to be clear. And it's important to note that the rating agencies, once you enter into this kind of a recapitalization process become very, very technical in their downgrades. Assuming that someone is entering into a recapitalization of the possibility, the probability shift, they have to downgrade you, assuming you enter into a lockup agreement, they have to downgrade you, assuming you initiate a process like we did in the U.S., and we now have in Sweden, they have to address that. And what they say is, listen, we want to see how you are when you emerge and then there's the anticipation that you would be rerated up, but that's up to them. That's not up to me. We will work with them very closely. They -- we are already working with them, but we will work with them even more closely as we emerge from this process to make sure they understand our financial trajectory. And I suspect it will be reflected in the ratings.

Yes. Yes. And I guess, the technical reason for the downgrade will also be unwinded at some point...

It takes some time, but yes, that is correct.

Then, of course, you have the operational, but that's not the question. With this what I could call recapitalization question, how has that affected your capacity, operational capacity? I mean, to start with, I guess, you and also management has been quite busy with this.

So starting with management, we'd like to get back to business, please, and deliver for our stakeholders, and we will. But that doesn't mean -- I mean, what's good about this is this is a holding company phenomenon, not an operating company phenomenon. Remember, we're in 20 countries. Remember, we have 27 regulated entities in 19 of those 20 countries. Our business, touch wood, we haven't lost a single client, a major client as part of this process. We have been very close with our employees, with our clients, with the regulators, with all our key stakeholders to make sure they understood every step of this process and where we're going, why we're doing it and where we're ultimately going to end up. And thankfully, it hasn't impacted our operations. We have been successful in separating it. Obviously, we also -- I've been spending a lot of time on this, the senior management is spending a lot of time on this. But thankfully, the team is also very deep. We have fantastic local market management teams. We have many of the senior management who don't have anything to do with this process. And we've been able to manage this and navigate this, I think, quite well.

Okay. And then I guess it's the same also with your financing partnering with Cerberus. That is the same can.

Yes. I mean, we're delighted to be partners with Cerberus. They're the biggest NPL investor in the world. We're the biggest NPL service in the world. It is a perfect strategic fit. As we had reported in the third quarter, we got off to a great start with the partnership. We'll give an update on that next week.

I see. Great. Looking forward to that one. I know that you can't answer that much about short-term operational since you are in [indiscernible] period. So we need to skip some of your questions, unfortunately. But I promise everyone that I will send them to Andres as well so that he will be able to address them next week.

Sure. No problem. Please do.

One question is also about -- I mean looking at the 10% debt write-down, and then also adding a significant amount of legal fees. Will the end result actually be a deleveraging out of this?

The answer is yes. I mean it definitely will be. Remember, we had 10% across EUR 3.3 billion, EUR 3.4 billion of bonds. We also have new financing that's being provided by those creditors to go out and repurchase any bonds. They continue to trade at a discount today, as I said a few minutes ago, suspect they will continue to trade a discount post [ red ] for some period of time. And we will hopefully take advantage of that and further delever using that, which can only be used for the sole purpose of repurchasing bonds. So there will be deleveraging. There will be deleveraging.

Great. Again, if you would like to ask a question use the question function in the platform, and I will read it out. I think we have spent a lot of time on bondholders and on that process. I mean, you mentioned a little bit about the RCF lenders. Can you say anything about that group? How is your dialogue with them? Or have there been any changes to that group?

We principally negotiated, as I said earlier, with a SteerCo of 6, 7, 8 banks. They're predominantly the Nordic banks. They're the largest holders. There are some other smaller holders or international banks. I have to say that from the moment we engaged with them early in last year to today, as recently as the last few days, they have been incredibly supportive. They've obviously wanted to sit down and do something that made sense for them. And for us, we ultimately agreed to that as part of this whole process, the RCF is being extended, being reduced in size, extended and terms are being adjusted. But I have to say they were committed to the process and committed to supporting the company throughout the process. So I'm incredibly happy with the way that interaction has gone. There have been some small international players who come in and out of the RCF, but that's to be expected, actually. But it hasn't changed and ultimately, the support is almost 100% of that group. And that's really where you see the true support coming from that group.

Yes, for sure. I mean that's some proof, at least with the voting. I also have one question around there's been some media speculations about secret solvency report. Could you comment on that?

Of course, I can. Of course, I can. First off, I want to be very clear, and this was particularly in the last few weeks in the Swedish press. It talked about secret solvency reports that said that we were solvent at the Board level. These solvency reports do exist. They are assessments that are required by Swedish law. They were done 3 times. They were done once by the Board before we entered into the lockup agreement, once before we paid the October 2024 maturity and once before we formally filed the Chapter 11. Those are required by Swedish law. They are an exercise which has specific parameters for the Board to make sure that they understand how they should behave. They're not secret, but they are confidential, to be clear. And also, there's been a lot of media speculation. We have shared those reports, but for selective redacted portions with the dissenting group with their lawyers and in fact, as part of the Chapter 11 process, and this is a public record, anyone listening to this can go on, listen to -- review the transcript of my testimony in the Chapter 11. I was asked very specific questions about each of those solvency assessments, about the conclusions on what -- how I interpreted them, all of that exchange regarding those reports is part of the public record and anyone can go see them. They are not secret, but they are confidential. And for the most part, they are going to remain confidential.

And I guess it will perhaps also be used in the Swedish court assessment.

That we are not going to publicize them. But let's be clear, the lawyers on behalf of the dissenting group have access to these reports.

I see. I think we will end -- there are some questions about if you could just summarize.

If I can answer, I'll address it.

A little bit summarize very briefly what's the next steps again and also address what concerns you may have for the risks in this process.

Yes. The next step, the most important step for 90-plus percent of the people listening who hopefully are our creditors and our key stakeholders is you need to prepare to receive instructions, and need to be prepared to vote when the Swedish process comes to a vote, it will happen in the first half of March. You will receive instructions. And again, all the locked-up creditors are legally committed to support the transaction. I would ask that as many of you as possible, please support the transaction, I believe it's the best thing for the company and for the creditors as evidenced by the level of support. But ultimately, I would ask all creditors to vote in whatever form or fashion they believe correct. That process will then -- once that vote is completed, shortly thereafter, the Swedish court will rule. And ultimately, we will be able to, after some level of structural conditions precedent that will be completed, affect the transaction sometime in the second quarter. What worries me, what risk? It's not done yet. It's not done until it's done. I'm confident because of where we come from, because of the process. We've gone through a very thorough examination of our situation following a very turbulent time in the first half of last year, as I said on the presentation. We've been very disciplined in engaging with all creditors, dissenting and non-dissenting and we ultimately have put forward a process where we gave a very important milestone in the U.S. And now we're in the Swedish process, which is a necessary process and independent process and that I'm confident we'll reach hopefully a favorable conclusion supporting the recapitalization. But I worry about a lot of things, Rickard, and I sleep okay, but I still -- I will feel much better when this process is done because it's not done until it's done. We're very advanced. We have this very important process right now in Sweden that we're dedicating our full attention to. And ultimately, I believe will be successful.

One question that has been quite active over the past. And this is a little bit around the deal that you struck with bondholders or still doing. But some investor, especially bondholders feel that the equity holders got off the hook quite easily. And I mean could you mention around the discussion with bondholders, how you achieve that? Because I hear from investors that, well, if we are to do any write-down on bonds, we need to wipe the full equity.

Listen, I'm not going to get into the details of the discussion. Obviously, we had a broad range of discussions with the bondholders as well as the RCF banks. More so with the bondholders because they're the next level down. Obviously, they're one level above the equity. We had a broad range of discussions. This is where we landed, and you've seen the levels of support. I think it's really a testament to the fact that and this is something that I think we ought to recognize that every party that we've been engaged with practically, perhaps excluding the dissenting group, although their argument is that we're perfectly solvent. But every group has supported the company and supported the plan. What does the plan do? It buys us time. With time, and recognize that the equity value is quite small relative to the debt. So you're talking about a very small amount. So the long-term prospects for the company with time are quite positive for the debt and for the equity. And that's why I think we landed where we landed. And that's the result of an extensive discussion, negotiations for a 10% issuance of equity. So the shareholders are suffering. And frankly, the shareholders have suffered, let's be clear. The stock price a few years ago before I became CEO was [ 200, 300 ]. We're now at around [ 29, 30 ] or something like that, and we were as low as 15. So the equity holders have suffered, but this process was about realigning our capital structure and the overwhelming number of creditors agreed to what we have on the table now.

A final question. I guess, it isn't that often you do a Chapter 11 during your career or are restructuring for that sake of this size. Is the -- I mean, at least partly in hindsight now, is there anything that you feel that you could have done differently in this process?

It's a very good question. Although I've been, call it, a party to or an observer to many of these type of restructurings in my career in past places that I've worked, I've never been the central person such as now leading a company going through it. It is an incredible process. I actually look back on the track record of the presentation that I made earlier, and I'm quite proud of how we behaved ourselves. We saw an obvious market difficulty and an obvious issue that was emerging. It wasn't immediate but we knew it was coming. We proactively engaged the best advisers. We proactively engaged with creditors. We then did a thorough analysis of the alternatives. We found the right place to be is start in the U.S., complete in Sweden. And frankly, I wish it had gone faster. But in retrospect, you can always say, I would have done this or done that. But ultimately, I'm very proud of the process. I think we are going to land in a good place. So are there things that I would dramatically do different, no.

Great. Thank you.

Thank you for hosting today and for some great questions. Hopefully, all of the investors have had a chance to communicate their questions. Hopefully, this is level set the information for all of you. It's filled in some gaps. It's corrected some misinformation, particularly in the media. And at the end of the day, what I want to do is just thank everyone because I'm sure there are people listening from all our stakeholder groups. I'm sure there are employees listening, I'm sure they're all external partners listening, there are creditors and shareholders as well as research analysts and the entire community, all of whom are important to our progress at Intrum. I want to thank you all for your time today, and thank you for your continued support. And next week, any questions you might have received, you said it earlier about specific results, please pass them on because I will address them next week when Johan Akerblom, our CFO and I do results, I believe, on the 30th, I believe it is. But stay tuned, and we will keep everyone informed on the Swedish reorganization and the recapitalization process. Instructions will come on what's required of creditors specifically, and we will be very clear. Thank you very much.

And thank you for joining this webinar. Hopefully, we will hear more, as you say, and have an end to this process as well.

Yes. We'd like to turn the page. Thank you.

Thank you.