Threatened with bankruptcy, Intrum gives the CEO 7 million in bonus – with borrowed money

Published 3 April 2024 at 09.02

Economics. Debt collection giant Intrum is threatened with bankruptcy when the over-leveraged company is expected to suspend its payments later this year. But despite the debt crisis, the board is now paying SEK 7 million in bonuses to its CEO – money that will likely disappear right in front of the creditors.

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Intrum and the debts

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Intrum's share has fallen by more than 90 percent in three years since it turned out that the company borrowed too much, and now Intrum is finding it difficult to cope with the tougher interest rate situation. The company is therefore threatened with bankruptcy when large loans fall due later this year.

– It could be one of the biggest bankruptcies in the Nordics, noted top manager Erik Hagerup earlier this year in an interview with Finansavisen.

Despite the wretched situation, CEO Andrés Rubio now receives a generous bonus of 7.3 million kroner, in addition to his fixed salary of 10.8 million kroner, writes the news site Nu.se.

The money is paid out with money that the company has borrowed, but despite the fact that the creditors may thus miss out on another 7.3 million kroner in the event of bankruptcy, the board defends its decision.

– Andrés Rubio has a market-based compensation, says Intrum's board chairman Magnus Lindquist to Dagens Industri.

Intrum has now hired the American investment bank Houlihan Lokey and the law firm Milbank to get budget and debt advice and to get a better handle on their finances. Houlihan Lokey is best known for handling the bankruptcy of Lehman Brothers during the financial crisis.

During an investor meeting on Monday, Rubio announced that Intrum does not plan to carry out any new issue to be able to pay off the large debt mountain. However, how the problem is to be solved is unclear.