Cabot Credit expected to launch £1bn market flotation next week

Stock market flotation plan of UK’s biggest debt collector thought to be back on track after earlier delay

The UK’s biggest debt collector, Cabot Credit Management, is understood to be preparing to launch a £1bn stock market flotation next week.

The flotation plan is said to be back on track after being delayed because Peter Crook, the former chief executive of troubled Provident Financial, had resigned from its board.

Cabot buys debts and loans in arrears from banks, utilities, telecom companies and local authorities, and then chases the borrower or customer for missed payments.

If the flotation of the Kent-based company goes ahead, it will be at a time when there are mounting concerns about the debts racked up by consumers on credit cards, personal loans and to buy cars.

Last month, the Bank of England said the UK’s biggest lenders could incur £30bn of losses on these types of consumer credit if the economy weakened and unemployment rose.

The Bank’s monetary policy committee is widely expected to increase interest rates from their record low of 0.25% at next month’s meeting in what would be the first increase since July 2007.

Cabot could not be reached to comment on the Reuters report that its flotation was back on. The firm, which is owned by US company Encore Capital Group and private equity house JC Flowers, is being advised by bankers at Goldman Sachs, Morgan Stanley and Jefferies.

It has operations in the UK, Ireland and Spain and runs a number of brands, including the Mortimer Clarke firm of solicitors, debt collection agency DLC and the Apex debt collections business.

There were reports in July that private equity firm Apax Partners was considering mounting a bid for Cabot. Such a move would derail any flotation plans.

Encore said in February that it was “exploring an initial public offering of Cabot Credit Management, which we believe will help crystallise the value we’ve created within our European franchise”.

At the time, the San Diego-based Encore said: “Since we purchased Cabot with our partner JC Flowers, we believe Cabot’s equity value has grown through operational improvement, market consolidation and expansion into other European countries.

“We are in the very early stages of the IPO [initial public offering] process, but we believe that it could be completed as early as the back end of 2017.”


Jill Treanor City editor

The GuardianTramp

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