US funds poised to swoop on troubled ASX companies

afr.com:

The ASX is set to become a hunting hotspot for private money as cashed-up global funds zero in on distressed companies.

That’s the view of White & Case restructuring partner Timothy Sackar amid a spike in corporate insolvencies in Australia.

“We continue to see listed companies in a number of sectors finding themselves in trouble,” Mr Sackar told The Australian Financial Review in an exclusive interview.

White & Case is bringing in a team of financing, restructuring and insolvency specialists, led by partners Brendan Quinn (left) and Timothy Sackar.(right). Oscar Colman

“It seems like a terribly good idea to raise capital at the time, but in a post-COVID world where you haven’t quite lived up to your business plan, you’ve borrowed too much money… we’ve seen a number of companies come unstuck.

“We think take-privates will become prominent because you’ll see more and more of those listed companies getting devalued, getting smashed on the exchange, and they’ll present opportunities for private credit to take hold.”

Mr Sackar joined White & Case at a time when the deep-pocketed global law firm was in the midst of a land grab and disrupting the corporate legal industry. Since landing in Australia in 2016, the firm has picked off Ashurst restructuring partner Sophie Lyall in Hong Kong, Clayton Utz special counsel Jillian McAleese and eight of Herbert Smith Freehills’s top partners, including key project finance partner Brendan Quinn.

White & Case poached the high-profile lawyer from Clayton Utz to set up its financial restructuring and insolvency practice in May and more hires are expected to follow.

Mr Sackar said two important themes were coming together to jumpstart ASX de-listings – the depressed economic environment