COPENHAGEN, July 16 (Reuters) - Swedish debt collector

Intrum said on Tuesday it had signed a term sheet

for an investment deal with Cerberus Capital Management that

would allow Intrum to scale its investments without increasing

its debt.

Intrum, Europe's biggest manager of bad loans, this month

completed the sale of a large portion of its investment

portfolio to Cerberus and said it would use the net proceeds of

7.2 billion Swedish crowns ($678 million) to reduce its own

debt.

The Swedish company has struggled as the pandemic, an energy

crisis and two-decade-high interest rates failed to unleash a

wave of loan defaults as expected, with investor concerns

mounting over Intrum's 60 billion crown debt pile.

Intrum and Cerberus will seek to jointly invest up to 1

billion euros annually depending on market conditions, Intrum

said in a statement.

Cerberus will provide 70% of the capital while Intrum will

provide 30%, with Intrum's level of investment subject to

downward adjustment under certain conditions.

Intrum and Cerberus have also agreed to exclusively

negotiate final definitive documentation, which is expected to

be completed by the end of this year, the company said.

($1 = 10.6203 Swedish crowns)