Source: Collection House
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  • Collection House (CLH) shares have plummeted after being reinstated, following the company’s completion of its recapitalisation process
  • The company completed the process after selling its purchased debt ledger to Credit Corp (CCP) for an upfront price of $160 million
  • Collection House has also secured a $15 million loan from Credit Corp and a $45 million senior debt facility from Commonwealth Bank (CBA) and Westpac (WBC)
  • Funds from the transaction will be used to repay its existing senior debt facilities, refinancing and restructuring costs and general corporate purposes
  • Both parties have, however, received and replied to an inquiry form the Australian Competition and Consumer Commission regarding the transaction
  • CLH shares began trading again today for the first time since February 2020 and have fallen 60.4 per cent to 43 cents while CCP shares have gained 1.2 per cent and been trading at $30.06

Collection House (CLH) shares have plummeted after being reinstated, following the company’s completion of the recapitalisation process.

The company completed the process after selling its purchased debt ledger (PDL) to Credit Corp (CCP) for an upfront price of $160 million and up to $15 million over the next eight years, depending on the performance of the assets.

Under the agreement, the Credit Corp was also entitled to cash received from the PDL portfolio from the start of October until the end of December 2020, net of an adjustment that was equivalent to an arms-length collection fee.

Collection House will use the majority of funds from the sale to repay its existing senior debt facilities and will also use some of the money for refinancing and restructuring costs as well as general corporate purposes.

The company has also secured a $15 million loan from Credit Corp and a $45 million senior debt facility from Commonwealth (CBA) and Westpac (WBC).

Both parties have, however, received an inquiry from the Australian Competition and Consumer Commission (ACCC) regarding the transaction.

Collection House has said it has replied to the inquiry and will assist the ACCC with any further inquiries.

CLH shares began trading again today for the first time since February 2020 and have fallen 60.4 per cent to 43 cents while CCP shares have gained 1.2 per cent and been trading at $30.06 at 1:00 pm AEDT.

CLH by the numbers
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