Two troubled non-bank lenders are in the news today.
Credito Real has delayed an involuntary U.S. bankruptcy hearing as it enters into talks with foreign bondholders to establish the assets left viable for recovery.
Meanwhile, Liberty Steel Group has reached an agreement in principle to restructure debts with Credit Suisse and Greensill Capital, which if finalised, will stave off insolvency proceedings.
Troubled Mexican non-bank lender, Credito Real, which collapsed after defaulting on a bond, is in talks with foreign bondholders to establish what assets the company has left and are viable for recovery.
There is a chance that the talks could lead to negotiations, with one person describing it as "a first step".
The bankruptcy proceedings in a Delaware court, originally scheduled for early October, will depend on the outcome of the talks.
Meanwhile, Liberty Steel Group, part of Sanjeev Gupta's GFG Alliance, has reportedly agreed in principle to restructure debt for all of its global operations, although negotiations are ongoing for its European business.
This latest move aims to arrange refinancing for the conglomerate's businesses in steel, aluminium and energy after supply chain finance firm Greensill filed for insolvency in March 2020.
The Financial Times reports that creditors are likely to recover less than half the amount initially lent to Liberty Steel and that the maximum creditors could recoup is 55%.
Although Liberty Steel Group has reached an agreement in principle with its creditors, it still faces challenges.
The conglomerate is currently under investigation by the Serious Fraud Office concerning fraud and money laundering suspicions, which it has denied.
Additionally, it is still attempting to refinance and deter legal action linked to unpaid bills following the collapse of Greensill Capital, one of GFG Alliance's main funders.
This announcement is the latest in 18 months of attempts by Sanjeev Gupta to refinance and fend off legal action against him.