Debt buyer and collector Collection House has completed a recapitalisation that will leave it largely debt free but with a greatly diminished business. The company announced the recapitalisation in February, involving the sale of part of its business to Credit Corp. Collection House sold its New Zealand purchased debt ledger to Credit Corp for around A$12 million. Credit Corp provided Collection House with a short-term working capital facility of $7.5 million, repayable when the NZ PDL sale was completed. Credit Corp acquired $52 million of senior debt from Collection House’s lenders, with an agreement that when the working capital facility was repaid Credit Corp would release Collection House from all remaining obligations. In a separate deal, Credit Corp bought Collection House’s Australian purchased debt ledger in December 2020. Collection House had been struggling to manage its debt for more than two years and the deal with Credit Corp was not the first attempt to recapitalise. While the deal will allow it to proceed with a clean balance sheet, it has left Collection House with a much smaller business and, having sold off its PDL operations, it will have to rely in the short term on low-margin collections business as its tries to rebuild. In the December half-year revenue fell 42.7 per cent to $26.5 million and losses blew out from $9.5 million in the December half 2020 to $63.7 million. Recovery won’t come quickly. According to the half-year financial report: “General levels of activity in the receivables management sector over the last six months remained depressed, as clients continued to implement conservative customer engagement strategies in response to the longer than anticipated COVID-19 recovery.” It said it bid on a number of debt purchasing opportunities during the half but missed out because prices were “prohibitively high.” It still owes $5 million on a $6 million senior limited recourse debt facility secured against an investment in Volt Bank. It is looking to sell the investment.