Sounds like every uni student's dream... but really, it could have major implications for the company.
Background: Camp Australia runs before and after school care, school holiday programs and pretty much any other program that helps care for kids.
What happened: When COVID hit, Camp Australia copped it. Its debts spiralled out to around $230 million, and they're struggling to repay them. Camp Australia's been trying to postpone payment of its debts, but the current lender, Goldman Sachs, ain't budging.
What else: Now, two investment firms have been buying Camp Australia's debt from Goldman Sachs for 65 cents on the dollar. That means the new debt buyer will only pay Goldman Sachs approximately $2.6 million for the $4 million of debt owed.
💡A debt buyer is a person or company that purchases debt from a lender, generally at a pretty steep discount. Goldman Sachs knows it will struggle to get its debt repayments so it would prefer to walk away with 65% of the original debt amount.
💡 Once they new debt buyer comes in, Camp Australia will owe its $4m debt to them instead.
💡The debt buyer will restructure the company to come back to a picture of health - and in this case - they'll turn some of the debt into ownership in Camp Australia.
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