Crash of GetBack's bonds and shares rattles Poland's investors (updated)

Quercus Towarzystwo Funduszy Inwestycyjnych SA

20/04/2018 14:16

* Fitch cuts rating to B-, says may downgrade it further
    * U to 30,000 retail bond investors exposed, newspaper says
    * GetBack share price down 87 pct since October
    * Outstanding debt at $520 million

 (Adds details, quotes)
    By Marcin Goettig
    WARSAW, April 20 (Reuters) - The credit rating for the debt
of GetBack, a Polish collection agency, was slashed to junk
status after the company's shares plunged almost 90 percent in
value.
    The ratings agency Fitch cut its rating for GetBack's debt,
which amounts to more than $500 million, late on Thursday. The
newspaper Parkiet estimated 30,000 retail investors in Poland
hold the bonds, some of which have already lost half their value
  GBK1220=WA .
    Fitch said its downgrade, to B- from B+, reflected
uncertainty about GetBack's access to funding and its liquidity.
The rating might be downgraded further, it said.
    GetBack bought up portfolios of distressed debt at higher
prices than its competitors, using short-term bond issues to
finance its purchases.
    "Most market participants expected that if any problems were
to come, they would do so only later, not at a time of high
economic growth, rising wages and record low unemployment," said
Lukasz Janczak, an analyst at the Warsaw-based Ipopema
Securities.
    Several Polish brokerages and banks have offered GetBack's
bonds and shares since the company first listed them last July.
Its market capitalisation grew to more than $840 million (2.8
billion zlotys) by October.
    The shares have lost 87 percent since then. Trading in both
the shares and the bonds was suspended earlier this week at the
request of Poland's financial-market regulator, KNF. The
regulator said on Friday it was taking "all necessary action",
without providing details.
    The troubles of GetBack  GBK.WA , which is controlled by the
private equity fund Abris Capital Partners, have dragged down
shares of other listed firms, including investment fund Quercus
TFI  QRS.WA , which held GetBack's bonds.
    The investment fund Quercus said on Thursday that GetBack
missed a 5.5 million-zloty ($1.63 million) payment on its bond.
Quercus shares were down 30 percent this month, even though the
fund said it disposed of all of GetBack's bonds and shares.
    GetBack Chief Executive Konrad Kakolewski was dismissed on
Monday after the company said it was in talks to secure
financing from Poland's largest bank and a state fund, although
both institutions denied that  urn:newsml:reuters.com:*:nL8N1RT0YU  urn:newsml:reuters.com:*:nFWN1RT035.
    GetBack officials were not immediately available for comment
on Friday. The company had been planning share issues worth up
to 70 percent of existing capital.
    
($1 = 3.3886 zlotys)

 (Reporting by Marcin Goettig, additional reporting by Marcin
Goclowski and Anna Koper, editing by Larry King)
 ((marcin.goettig@thomsonreuters.com; +48226539720; Reuters
Messaging: marcin.goettig.reuters.com@thomsonreuters.net))