RPT-INSIGHT-Olympic Casino's asset grab unnerves European junk bond investors
Olympic Entertainment shifts assets away from creditors
* More European firms may follow in COVID-19 fallout -analysts
* INSIGHT-The devil’s in the detail for junk debt:
By Yoruk Bahceli
AMSTERDAM, July 3 (Reuters) - A sleight of hand by the owner of an Estonian gaming company is alarming investors worried that tactics used by private equity firms in the United States to shift assets away from creditors are coming to Europe.
Olympic Entertainment, owned by private equity firm Novalpina Capital, told bondholders on June 18 it had moved some assets - all its online operations and a Lithuanian business - into an entity not bound by its credit agreements, according to an email seen by Reuters.
The company, which operates the Olympic Casino brand, distributed shares in the separate entity to a parent company controlled by Novalpina, the email said, effectively paying the London-based firm a dividend.....MUCH MORE
Olympic Entertainment, which had 114 casinos at the end of 2018 in Estonia, Latvia, Lithuania, Slovakia, Italy and Malta, did not respond to requests for comment.
Olympic’s asset shift means holders of a 200 million euro bond maturing in 2023 would no longer be able to make a claim against the assets were the company to go bankrupt, according to bondholders questioning the move and lawyers.
Lawyers said the transfer, which was legal according to the bond’s terms, was the first such move in Europe’s debt markets.
It is, however, all too familiar to investors in U.S. companies.
In 2017, retailer J.Crew shocked debt markets by using assets it had moved out of the reach of creditors, despite them being pledged as collateral, to raise more debt....
