MSN MoneyCentral – Europe could face a wave of corporate restructuring in the second half of this year or first six months of 2008, according to a survey of US and European hedge funds and otherinvestors.<\/p>\n
The survey \u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u20ac\u0153 conducted by Cadwalader, Wickersham & Taft, the law firm, Rothschild, the investment bank, and Debtwire, publishing group \u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u20ac\u0153 says private equity-owned companies could be particularly vulnerable to problems. Most buy-out groups predict that up to a fifth of their deals will run into trouble in the next three years, the report adds.<\/p>\n
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It finds that paper and packaging and chemicals are the most likely sectors to generate restructuring business.<\/p>\n
“Rising commodity and energy prices are putting pressure on producers in the paper\/packaging and chemicals sectors,” says Richard Millward, of Rothschilds.<\/p>\n
Germany is considered to be the most vulnerable country market. The survey comes amid a growing debate about how vulnerable businesses could be to a deterioration in borrowing conditions. The cost of raising debt finance has been unusually cheap for risky companies in recent years \u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u20ac\u0153 one factor that has enabled private equity players to embark on highly indebted deals.<\/p>\n