Brighthouse eyed by hedge funds in debt for equity deal

A consortium of bondholders headed by Apollo hope to organise a debt for equity swap at Brighthouse, The Telegraph reported.

Vision Capital, the private-equity owner of Brighthouse, could lose out if the deal goes ahead.

Vision acquired Brighthouse a decade ago, when it was valued at £180m.

However, tighter financial regulatory scrutiny has since hit Brighthouse.

The Financial Conduct Authority (FCA) investigated concerns that rent-to-own deals were leading consumers to take on debt at high interest rates they could not afford. Punitive late payment charges also prompted concern.

The FCA eventually decided it was “minded to” award the company a consumer credit licence but ordered stricter checks on customers’ financial health, which resulted in a fall in sales and profits at Brighthouse.

That means it is battling to refinance its own debt, and borrowings are due to be repaid next year.

Vision has tried to retain control of the business by teaming up with Apollo and tabling a restructuring plan of its own, according to the Telegraph, but the proposal was rejected by other bondholders.