ROME: Distressed debt investors are looking to buy shipping loans from Italian banks, encouraged by legal and regulatory changes that could reduce the chances of them getting embroiled in drawn-out bankruptcy proceedings.
U.S. hedge funds including Davidson Kempner, King Street Capital, York Capital and private equity firm Z Capital, have set their sights on an estimated $13 billion of shipping loans portfolios held by Italian banks, six sources said, speaking on condition of anonymity. Some of the loans are bad debts.
Buyout funds KKR (KKR.N) and Oaktree (OAK.N) are also considering shipping debt deals in Italy, the sources said.
Some of the U.S. hedge funds, often described as “vulture funds” as they buy assets cheaply before selling them on in a rising market, are eyeing portions of the 373 million euro ($406 million) debt of shipping firm Premuda (PRNI.MI), the sources said.
Premuda said last month it “will perform a series of divestments of assets” as part of a plan proposed to its banks.
Four sources said other targets include Gestioni Armatoriali, Perseveranza SpA, D’Alesio and bulker and tanker firm Rizzo-Bottiglieri-De Carlini (RBD), which filed for U.S. insolvency in April, according to a court filing.
Perseveranza co-Chief Executive Angelo D’Amato told Reuters that his firm has repeatedly been approached by international investors in recent months seeking to buy its debt, currently under restructuring, at a bargain price. Management had no interest in negotiating.
Vulture funds are unable to grant business continuity, which is our main task these days,” said D’Amato.
Their plan is to make a quick profit by buying loans at the cheapest possible price, securing vessels as collateral and selling them (the ships) as soon as they see a window of opportunity,” he said.
Premuda, RBD, Gestioni Armatoriali and D’Alesio could not be reached for comment.
Davidson Kempner, King Street Capital, York Capital, Z Capital, KKR and Oaktree declined to comment.
