Auditor BDO Cuts Jobs With Focus on Managing Apollo Debt
(Bloomberg) — Audit firm BDO USA, Apollo Global Management Inc. He cut costs by managing an expensive debt deal with .
BDO has laid off dozens of employees in recent months and halted nonessential travel earlier this year, according to people familiar with the situation who asked not to be identified citing private matters. The cuts affect business lines such as auditing, tax and consulting, one of the sources said.
The austerity decision comes as one of BDO’s clients, the now-bankrupt First Brands Group, battles angry creditors over its use of off-balance sheet finance. Some said the auto parts supplier was among BDO’s biggest customers. BDO said in a statement that it does not comment on customers.
According to filings, Apollo became the largest lender to BDO with a $1.3 billion loan facility accepted in August 2023. The loan currently pays around 9% interest, according to filings. Filings show the deal was refinanced as of June 30 and the interest rate was reduced by 100 basis points.
A representative from BDO said the company’s financial position is sound and it regularly reviews its operations to ensure maximum efficiency.
A representative for Apollo declined to comment.
BDO used the debt from Apollo to fund its Employee Stock Ownership Plan in 2023, according to the filing. In January, a participant proposed a class-action lawsuit, claiming workers were overpaid to participate in the plan.
In March, BDO gave First Brands an unqualified opinion, the highest seal of approval an auditor can give, one of the sources said. But just a few months later, First Brands asked Deloitte to produce a quality earnings report on the firm after lenders increased scrutiny of its use of trade finance.
The sudden collapse of First Brands caused investors to suffer huge losses due to debt exceeding $10 billion. Apollo began betting against the auto parts supplier’s debt last year and profited last month as the company’s loan prices fell. Apollo recently closed the position, Bloomberg News reported.
–With help from Isis Almeida.
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