6 October 2015 – Expansión
BMN is completing the sale and outsourcing of its recovery business in an agreement with Lindorff. The entity, led by Carlos Egea, has awarded the management of its late-stage non-performing debt portfolio (balances that have been overdue for more than 120 days) to the Norwegian financial group, according to financial sources consulted by Expansión.
According to the same sources, Lindorff has paid around €20 million for the contract to manage this debt for ten years.
It is the second such contract that BMN has awarded to Lindorff. The Norwegian group has been managing BMN’s early-stage non-performing debt portfolio (balances that have been overdue for up to 120 days) since the beginning of 2014; it paid €36 million for this contract.
The nationalised group also did the same thing with its own firm Inmare, dedicated to the management of foreclosed assets and real estate debt; it sold the company to Aktua (owned by Centerbridge) for almost €50 million.
In total, BMN has obtained just over €100 million from these kinds of operations in recent years. These types of sale allow the entity to generate capital gains, which it uses to strengthen its capital base. Although the funds, in this case Lindorff, pay the capital upfront, they recover it subsequently through commissions based on objectives.
One of the other reasons behind such deals, which would have carried less weight in this transaction, is the outsourcing of a service in which banks are not experts and whose results improve when it is delegated to specialist firms such as Lindorff.
The operation has been advised by Montalbán Atlas Capital, a firm that has coordinated similar transactions in the past, such as the one closed by Popular, which sold its recovery business EOS for €135 million; and Sabadell, which sold its business to Lindorff, for €162 million.
Original story: Expansión (by J. Zuloaga)
Translation: Carmel Drake