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Saudi PIF Retrenches; QVC Shareholders Challenge Plan
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Welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Monday, April 20. In today's briefing, Saudi Arabia’s Public Investment Fund is preparing to restructure its massive portfolio and potentially shutter LIV Golf as dwindling cash reserves and regional instability force the sovereign wealth fund to abandon its underperforming ventures. And QVC’s preferred shareholders are seeking an equity committee to challenge a reorganization plan that allegedly utilizes a previously undisclosed $400 million intercompany claim to divert value away from the holding company.
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The LIV Golf tour kicked off in Mexico City this week even as it faced the possibility of imminent closure. Hector Vivas/Getty Images
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Saudi Fund Behind LIV Golf Has $900 Billion but Is Still Strapped for Cash
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Saudi Arabia’s flagship wealth fund is known for backing costly ideas overflowing with ambition, from building a futuristic city to creating a golf circuit to rival the PGA Tour. The fund’s vast financial commitments are now forcing it to rein itself in.
Despite having assets above $900 billion, Saudi Arabia’s Public Investment Fund is strapped for cash. LIV Golf appears poised to join a long list of ambitious projects it has all but abandoned. The Iran war has made the fund’s outlook even shakier.
LIV Golf, which loses hundreds of millions of dollars a year, is facing the possibility of imminent closure as the PIF is on the verge of pulling its support for the league, The Wall Street Journal reported earlier this week.
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QVC Preferred Shareholders Seeks to Form Committee
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Preferred shareholders of bankrupt multimedia retailer QVC Group say an equity committee is needed to challenge a proposed reorganization that they claim would unfairly divert value from a holding company to help cover a subsidiary’s debts.
Josh Brody, a lawyer representing a preferred shareholder group, said the restructuring plan would give primary operating subsidiary QVC Inc. a previously undisclosed $400 million claim against parent QVC Group. The claim, Brody told the U.S. Bankruptcy Court in Houston on Friday, would “suck value” from the holding company at the expense of preferred shareholders who otherwise could get a “meaningful” recovery.
QVC entities entered bankruptcy Thursday owing more than $6.5 billion to creditors that include Silver Point Capital, Strategic Value Partners and Oaktree Capital Management. QVC also has roughly $1.3 billion in preferred equity.
–Becky Yerak
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Private Credit Is on the Hunt for Credit-Card Debt
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When Wells Fargo told the fintech Bilt that it would no longer be the lender for its rent-rewards credit card, Bilt scrambled to find another large bank partner. When that failed, Bilt wound up with private-credit funding.
In February, Bilt struck a deal to move roughly $1.2 billion of credit-card balances with funding arranged by a group including Blue Owl Capital and Stone Point Capital
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as well as Goldman Sachs and TD, according to people familiar with the deal.
The companies also agreed to fund hundreds of millions of dollars of credit-card balances that Bilt cardholders will incur in the future, the people said.
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Blue Owl Founders Revise Terms of Personal Loans That Raised Scrutiny
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Shares in Blue Owl Capital have dropped nearly 40% so far this year amid investor jitters about private credit.
Now, the firm’s co-CEOs removed one drag on its stock by revising the terms of personal loans they took out against their shares.
Doug Ostrover and Marc Lipschultz had borrowed against their stakes in Blue Owl, raising concern on Wall Street that the company’s falling stock price could open them up to margin calls and add downward pressure.
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Iran War Casts Gloom Over Outlook of World Finance Ministers and Investors
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World leaders, bankers and investors who convened this week for the International Monetary Fund and World Bank’s spring meetings were in a dour mood.
The yearly meetings in Washington bring together heads of state and financial officials from around the world to meet with each other and consult with investors and bankers. Participants predicted that economic and financial turbulence related to the war in Iran would persist for weeks, if not months.
Their main focus was the energy shock from the closure of the Strait of Hormuz, which appears to be even greater than the one seen in 2022 when Russia’s invasion of Ukraine disrupted gas supplies and stoked higher inflation worldwide.
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