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Piraeus Bank pushes the implementation of its NPL reduction plan

Piraeus Bank seems determined to continue implementing the plan to reduce its non-performing exposures, despite the sharp decline in interest due to the coronavirus, with scant, for the time being, results.

The spread of the pandemic in Europe found Piraeus, as well as other domestic banks, in the middle of the implementation of a program to reduce its non-performing exposures, in order to consolidate its balance sheet.

In the above context, two tender procedures were in progress: the first in cooperation with Eurobank concerned the sale of the loans of the Kypriotis hotel group and the second, the first three portfolios of the Trinity project. On top of those, three more were added for the loans of MIG, the businessman I. Avrantini (NEL) as well as the sale of a loan with a pledged hotel in Serbia.

The sale of the loans of the MIG group, with a nominal value of €548.8 m and a slightly higher total demand, is the most important process, as the loans are secured by all shares of Vivartia and Attica Group, held by MIG. Piraeus decided in early March to start the tender, surprising the market, which considered it reasonable to postpone the process, so as not to be affected by the drastic deterioration of the investment climate.

The submission of a single binding offer by the Irish Comer Group, which is said to be subject to price hurdles linked to the impact of the pandemic and its measures on the economic activity of the MIG group, confirmed the estimates of the market. Since March 23 until today, Piraeus has not taken an official position on the tender, while Comer’s offer was not discussed at the Board of Directors of the Bank, which took place last Friday, March 27.

Therefore, it is not clear whether the bank will consider the offer as a basis for discussion and enter into a period of exclusive negotiations with Comer or will declare the tender barren. In the latter case, the bank must, in the light of the prevailing conditions, request the supervisor’s tolerance for the timing of a new tender.

The second tender procedure concerns the sale of a series of non-performing business loans, a total claim of €760 m and a net book value of €119 m (project Trinity). These are reported or pending loans from contractors, hoteliers, publishing companies, etc.

For the first three portfolios of the Trinity project, Piraeus has been in negotiations with PIMCO since last month, after the submission of binding offers. Recently, non-binding offers were submitted for Trinity 4.

At the same time, a tender procedure is underway for the sale of the non-performing loans of the businessman Ioannis Avrantinis, with a total report of €137 m and an accounting value of €16 m. These loans are secured by shares of companies that control wind farms (operating or licensed) with a capacity of about 30 MW.

The outbreak of the pandemic has found Piraeus and Eurobank to discuss with HIG Capital the signing of a binding agreement for the sale of loans of the Kypriotis hotel group, after a “painful” tender as the collapse of Thomas Cook.

Piraeus’ total demand for the above loan amounts to €69 m euros and the net book value amounts to €41 m. The discussions have been frozen until the visibility for the next day of tourism is improved.

Finally, Piraeus is ready to start a tender process for the sale of a loan, which is secured by a hotel in Belgrade (project Danube), while the completion of the transfer to the Czech APS of the Iris portfolio is still pending. These are mainly unsecured loans with a total claim of 1.8 billion euros and a net book value of 76 million euros at group level.

Original Source: Euro2day

Adaptation/Translation: Kiki Athanasiadis