Factbox: Corporate debt woes are on the rise

Heba Fastighets AB

18/07/2023 06:10

LONDON, July 18 (Reuters) - From Britain to Sweden and
France, debt-laden firms are starting to feel the strain from
high inflation and interest rates.
    Here's a snapshot of some European companies whose financial
woes are now in the spotlight. 
    
    1/ Thames Water  KMBWTU.UL 
        Significance: Britain's biggest water supplier. 
    Size of debt: 14 billion pounds  ($18.33 billion).
    What's at stake: The UK government is considering temporary
state ownership if Thames Water cannot raise more funds to drive
its turnaround. 
    Action taken: Since last year Thames Water has asked
shareholders for an extra 1 billion pounds of investment on top
of the 500 million pounds they provided in March, to strengthen
its balance sheet and fund the necessary upgrade of ageing
infrastructure. The firm said earlier in July shareholders would
provide 750 million pounds, but warned it would need an extra
2.5 billion pounds between 2025-2030.
    Deadlines to watch: By Oct.2, England and Wales's largest
water companies must provide the regulator with their business
plans for 2025-2030.

        2/ Casino  CASP.PA 
    Significance: France's sixth-biggest food retailer by market
share; employs more than 50,000 people in France.
        Size of debt: 6.4 billion euros ($7.19 billion) in net
debt.
    What's at stake: Casino faces 3 billion euros of debt
repayments in the next two years, with rating agencies Moody's
and Standard & Poor's warning a default is likely. The holding
company through which veteran entrepreneur Jean-Charles Naouri
controls Casino is also heavily indebted. 
    Action taken: In May, Casino started court-backed talks with
creditors; in June, it asked interested parties to table offers
entailing at least 900 million euros of new money to fund a
relaunch.
    Czech billionaire Daniel Kretinsky is the frontrunner to
take over Casino after rival bidders 3F Holding pulled out of
the race. Kretinsky submitted a revised offer over the weekend
proposing a 1.2 billion euro equity injection and the conversion
of close to 5 billion euro debt into equity.
        Deadlines to watch: Casino aims to secure an agreement
with creditors by July 27. 
    
        3/ SBB  SBBb.ST 
        Significance: One of Sweden's largest commercial
landlords.
        Size of debt: 81 billion Swedish crowns ($7.95 billion).
    What's at stake: SBB has been fighting for survival since
its shares plunged in May on concern over its financial position
and the refinancing of its debt pile. Its problems, together
with worries about a weakening economy and rising interest rates
have hurt Sweden's crown. 
    The firm scrapped a planned rights issue after its credit
rating was downgraded to junk in May.
    Sweden meanwhile is investigating whether SBB broke
accounting rules in its 2021 annual report.
        Action taken: SBB is looking to find a buyer for all or
parts of its business to improve its finances. It has sold
almost all of its stake in property company Heba  HEBAb.ST , and
plans to sell the remaining 51% of its education subsidiary
EduCo to Brookfield.
    Deadlines to watch: SBB aims to reach an agreement for the
EduCo stake sale by end July.
        
  
        4/ Celsa
  
        Significance: Spain's largest private industrial
company; employs 4,500 staff in Spain.
        Size of debt: close to 3 billion euros.
    What's at stake: The 2020 COVID crisis affected Celsa's
business due to lock-downs and difficulty obtaining raw
materials, leading to a 364 million euros loss. While
performance has since improved, creditors argue the company is
in default and its equity is worthless.
    Action taken: Creditors in September submitted a
restructuring plan under a new insolvency law that would see
them cutting the debt by around 1.29 billion euros and taking
control of the firm. But shareholders are contesting their
valuation as they try to retain control of the group.
    Deadlines to watch: Following a six-day court hearing in
July, a Barcelona judge is expected to rule on the restructuring
plan in September.
    
($1 = 0.7638 pounds)
($1 = 0.8895 euros)
($1 = 10.1947 Swedish crowns)    

 (Reporting by Chiara Elisei and Dhara Ranasinghe, editing by
Christina Fincher)
 ((Dhara.Ranasinghe@thomsonreuters.com; +442075422684;))