April 20, 2018 / 1:20 PM / 10 months ago

UPDATE 2-Crash of GetBack's bonds and shares rattles Poland's investors

* Fitch cuts rating to B-, says may downgrade it further

* Up to 30,000 retail bond investors exposed, newspaper says

* GetBack share price down 87 pct since October

* Outstanding debt at $520 million (Adds GetBack’s comment)

By Marcin Goettig

WARSAW, April 20 (Reuters) - The concerns of investors in Poland grew on Friday after Fitch slashed the credit rating of the collection agency GetBack, whose shares had plunged almost 90 percent.

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 up to 30,000 retail investors in Poland hold the bonds, some of which have already lost half their value.

Fitch said its two-notch downgrade to B-, a rating that indicates high risk, reflected uncertainty about GetBack’s access to funding and its liquidity. The rating might be downgraded further, it said.

GetBack had bought up large portfolios of distressed debt throughout the past year at higher prices than its competitors, using short-term bond issues to finance the 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.

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 .

“The supervisory board has made changes in the board to restore investors’ trust in the company,” GetBack said in a statement sent to Reuters. “The new board is currently intensively working on the plan of action for the upcoming days.”

The company had been planning share issues worth up to 70 percent of existing capital.

The troubles of GetBack, which is controlled by the private equity fund Abris Capital Partners, have dragged down shares of other listed firms, including investment fund Quercus TFI , 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.

$1 = 3.3886 zlotys Reporting by Marcin Goettig, additional reporting by Marcin Goclowski and Anna Koper, editing by Larry King

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below