Can a trophy ease Jim Ratcliffe’s Manchester United woes?

One thing to start: Builder.ai, one of the UK’s best-funded technology start-ups, is entering insolvency proceedings, weeks after restating its revenues and admitting “problems” under its past leadership.

In today’s newsletter:

Jim Ratcliffe’s trophy hope

Jim Ratcliffe has a small chance at redemption this evening.

The Monaco-based billionaire behind chemicals empire Ineos has been fighting twin problems in business and sport.

Ineos has struggled with a sector-wide downturn, linked to the faltering health of the global economy and international energy prices.

And Manchester United, the football club that boyhood fan Ratcliffe bought a huge stake in last year, sits in 16th place in the Premier League as this season wraps up, two spots above relegation. It’s on course for its worst finish since 1975.

Despite all that, Ratcliffe’s United has a shot at making it to Europe’s top football competition if it beats Tottenham Hotspur this evening.

Win the Europa League final on Wednesday and United will qualify for the Champions League.

A victory would salvage what has been a disappointing first season of ownership.

Ratcliffe joined a club struggling to recover its mojo and promised a revival. That hasn’t materialised so far.

The club’s troubles on the pitch have been compounded by financial issues that have only worsened since Ratcliffe joined.

United’s decision to give previous manager Erik ten Hag a new contract last summer only to fire him a few months later cost about £21mn.

That came after a five-year spell of consecutive losses totalling more than £370mn. 

Earlier this year, the club said up to 200 people would be made redundant, bringing the total number being let go under Ratcliffe to 450 people, or a third of the workforce.

Less than a month later, Ratcliffe unveiled plans for a new £2bn stadium. Suffice to say, that didn’t go down well with fans, who questioned the wisdom of the outlay given the state of the club’s purse and the lay-offs.

Ratcliffe will be hoping the club wins today. There’s nothing like a trophy to keep the naysayers at bay.

Lose, and United will miss out on lucrative broadcasting income and a shot at competing with Europe’s best teams.

But by a strange quirk of its bond covenants, a loss could save United more than £700mn. (Note, this scenario relies on United’s rolling 12-month ebita falling below £65mn. The closest it came to that was in 2022, when ebita reached £81mn. More on this from Alphaville).

CATL roars in stock market debut

If you drive an electric BMW, Ford or a Tesla, the chances are you’ve already used a CATL battery.

The Chinese battery maker is the world’s largest, controlling about 37 per cent of the world’s EV and energy storage battery market.

Now it can add another feather to its bonnet. CATL’s Hong Kong stock market debut on Tuesday was the biggest of the year so far, raising at least $4.6bn.

The IPO drew investors including the Kuwaiti sovereign wealth fund, China’s state-owned energy company Sinopec, Oaktree Capital Management and an Agnelli family-backed fund.

CATL shares rose more than 16 per cent on Tuesday, ending the day at HK$306 ($39) per share. In a sign of how popular the listing was, the company’s Hong Kong share price rose above its Shenzhen price, in defiance of the usual premium that the mainland Chinese share price enjoys.

Hong Kong’s fee-starved bankers are also celebrating the listing. US banks including JPMorgan and Bank of America advised on the IPO, ignoring a Republican lawmaker who called for them to step off the deal on national security grounds.

The FT had previously reported that Chinese banks were offering rock- bottom fees to work on the deal, underscoring the intense competition for this listing.

The IPO is another victory for Hong Kong as an offshore Chinese capital hub, where international-facing Chinese companies raise funding and base their non-mainland operations.

CATL said in its filing that it needed the funds from the listing for overseas expansion, particularly for its European factories, from which it could supply carmaker partners. 

Other companies, such as Midea, which listed last year in the territory, also took the same approach while other Chinese companies are surely considering following suit.

The listing is also a question of “right place, right time”. The battery maker, which made $50bn in revenues last year, of which 30 per cent came from outside China, had its listing in the wake of the first sign of a US-China détente on trade. 

It came at a moment when global investors are rethinking their exposure to the US. Many jumped at the opportunity to invest in a leading hard tech company coming from China.

Casino prepares for second creditor showdown

How long after completing one multibillion-euro restructuring should a company wait before approaching another?

For French grocer Casino, the answer could be “not long”.

After a bruising battle with creditors in which more than €5bn of debt was wiped out and exchanged for equity in 2023, the value of Casino’s debt has once again slumped to deeply distressed levels.

Bondholders are expecting that continued weak earnings could trigger a breach of its loan covenants next year.

Restructuring advisers are actively seeking mandates with Casino’s different classes of creditors.

Czech billionaire Daniel Křetínský took control of the company last year while pumping in nearly €1bn of new equity.

Now, he’s facing up to the likely prospect of a rerun, this time from inside the company.

Casino’s loans plunged in recent weeks after it became apparent to bondholders that the grocer is likely to breach a strict covenant on a €1.4bn secured loan and a separate €711mn credit line from banks.

Specifically, the ratio of net debt to earnings in its core business must be below 8.34. That figure stood at 14.6 at the end of March.

Despite its precarious situation, Casino is by no means alone in France.

Care home operator Colisée has struggled in recent years. On Tuesday, its owner EQT offered to inject €220mn to help secure a restructuring deal.

Another of EQT’s French portfolio companies, medical laboratory group Cerba, is also trading at distressed levels.

All this follows the landmark €24bn deal Patrick Drahi’s Altice telecoms group struck with creditors of its French business earlier this year.

Pressure is mounting on France’s heavily-indebted companies. Interest rates have risen, the economy is flagging and the country’s businesses have lost much of the Covid-era support they once enjoyed.

Many traditional fixed-income investors don’t have the risk appetite for such deals. But hedge funds around the world are waiting to pick up the pieces.

Job moves

• UK Government Investments has appointed Harry Hampson as its director of corporate finance. Hampson will leave his role as global chair of investment banking at JPMorgan Chase, where he has worked for 37 years, at the end of June.

• Law firm A&O Shearman has rehired M&A partner George Knighton, who co-headed Skadden’s UK corporate practice.

• Harbinger Sports Partners Fund has launched with Dallas Mavericks minority owner Mark Cuban as a general partner. The $750mn private equity fund aims to take minority stakes in the NBA, NFL and MLB. 

• Cleary Gottlieb has hired Humayun Khalid as a partner in its private credit practice. He joins from Goldman Sachs, where he headed structured credit solutions and the Americas restructuring group.

Smart reads

Recession fears Wall Street has cheered the US’s tariff deal with China, the FT writes. But on Main Street, prices are rising and confidence is plummeting.

Crypto heist Criminals stole nearly $250mn in cryptocurrency from an unwitting victim last year, The New York Times writes. The journey to recover that money reveals the sprawling scale of the crypto underworld.

Stealth wealth Most of America’s top earners own boring yet highly lucrative businesses, The Wall Street Journal reports. From grocers to car dealerships, meet the “stealthy wealthy”.

News round-up

Thames Water freezes executives’ ‘retention payments’ after backlash (FT)

JPMorgan London trader unfairly dismissed despite spoofing (FT)

Deloitte to cut UK bonuses, pay rises and promotions (FT)

​Equinor to resume $5bn Empire Wind project after Trump administration reversal (FT)

Julius Baer hit by $157mn loan loss in latest blow to turnaround efforts (FT)

Google offers ‘AI mode’ in ‘total reimagining of search’ (FT)

EU to impose €2 tax on low-cost items in blow to Temu and Shein (FT)

Top US state Republicans urge SEC to consider delisting Chinese companies (FT)