DISTRESSED ASSETS GO TO PROFIT
The dependence of the Russian business on foreign technologies together with the devaluation of the ruble and the growth of yuan poses a bankruptcy threat to one in ten companies, according to the calculations ot the analysts of the Legaсy Square Capital. The construction market, engineering and instrumentation, oil and gas production equipment manufacturing and logistics are likely to suffer the greatest losses. The investment funds buying up the debts of the companies that have gone down in value and giving them «a new lease of life», expect to get the return up to 30% per annum.
The margin of safety accumulated before the crisis is practically exhausted for over 10% of the companies, according to the calculations of the analysts of the Legaсy Square Capital, the management company of the investment fund, created by a group of investors headed by Vladimir Palikhata. During the crisis, the companies depending on western technologies have suffered the most: thus, the devaluation of the ruble, the growth of yuan in relation to the ruble and expensive credits made one in ten companies a potential
Around 15% of the companies that took the credit in dollars before the crisis, now won’t be able to carry out their obligations to the banks. «The banks that represent the real estate sector — from logistics to class A, А+ office centers, shopping mall owners — have their own difficulties»,- state the analysts of the Legaсy Square Capital. In their opinion (during the assessment, the data of the Unified Federal Register of Bankruptcy Information was used), the market ofreal-estate , construction, engineering and instrumentation, oil and gas production equipment manufacturing and logistics is in the bankruptcy risk area. According to data of the Unified Federal Register of Bankruptcy Information, the number of companies that reported bankruptcy in the first half of this year has grown by 15%, up to 7.6 thousand in comparison to the first half of the year 2014.
In the difficult economic situation, the investment funds become active that make money with distressed assets — pay off the debts to the bank at a discount, preserve and recover the business with the involvement of professional executives, giving the enterprises that are at risk of a bankruptcy «a new lease of life» and proposing a high income to the investors. «Also, this work leads to the recovery of the economy of the whole country due to the improvement of the financial situation of enterprises, as well as the preservation of jobs»,- state the representatives of the Legaсy Square Capital that has already attracted over $250 million for the implementation of the projects. The fund is conducting several projects in retail, food production, logistics (it withholds the information on the company names) and is in the process of closing three more deals in the territory of Russia and Ukraine. An average investment amount starts from $20 million and up. In order to «enter» the project, as indicated by the representatives of the investment fund, the target company must have the
Then again, the latest statistics of the bankruptcy courts indicate that more and more often the companies go bankrupt never living to see the help from the investment bankers. Thus, if last year the number of cases in charge amounted to 37.8 thousand, current year, as of the beginning of November, it’s already 49.2 thousand. This year, the most