Eurobank decides PIMCO, doValue bids for FPS both acceptable, sources say
Eurobank’s board concluded on Tuesday that competing offers by US funds group PIMCO and Italian bad loan specialist doValue for the Greek bank’s loan-recovery unit FPS were both satisfactory, banking sources told Reuters.
European Central Bank (ECB) supervisors have been pushing southern European banks to shed loans that turned sour during the last recession. With economic growth in the bloc faltering again, they are keen for lenders to step up their efforts.
A final decision would be made after the Greek parliament approves legislation on non-performing loans, known as the Hercules asset protection scheme, the sources said.
The parliamentary vote on the scheme is expected later this month.
Eurobank, Greece’s third largest lender, has pledged to quickly cut the problem loans that make up more than a third of its lending portfolio.
Loan recovery units such as FPS, which carry with them long-term debt collection contracts, are particularly sought after, and banks have been selling them together with bundles of loans.
The sale of FPS is a key component of balance sheet clean-up efforts at Eurobank.
Verona-based doValue, owned by Softbank-backed Fortress Investment Group, had made a preliminary bid this year but failed to enter exclusive talks.
The firm has operations in Greece after clinching a deal last year with Eurobank and three other lenders to manage 1.8 billion euros in soured corporate loans.
In July, Eurobank had picked PIMCO, its sixth-biggest investor, as the preferred bidder for an 80 percent stake in its Financial Planning Services (FPS) unit, setting a three-month deadline to reach an accord after exclusive talks.
Sources had said Eurobank valued FPS at about 300 million euros ($331 million) but was struggling to bridge a valuation gap with PIMCO, which judged the unit’s worth below that amount.
Keen to finalize the sale of FPS, Eurobank continued talks with PIMCO after a Sept. 30 deadline passed with no agreement, despite diverging views on the value of the unit.
[Reuters]
