10 April 2017 – Voz Populí
Financiera El Corte Inglés has selected three overseas funds as candidates to go through to the final round of its tender to award the first sale of doubtful loans in its history. The entity that is jointly owned by Banco Santander (51%) and El Corte Inglés (49%) has chosen Axactor, Cabot Financial and Link Finanzas as the finalists in Project Alexandria.
Through this process, Financiera El Corte Inglés wants to clean up the worst part of its credit portfolio, by selling off loans that it deems irrecoverable. Project Alexandria comprises 140,000 doubtful credits, mainly corresponding to loans worth €160 million.
This operation is generating a great deal of interest in the market, because to date, El Corte Inglés and its financing arm have not put any portfolios on the market. For this reason, the funds are all willing to pay a premium in order to begin to collaborate with the largest consumer finance company by volume of loans.
The three funds selected to participate in the final phase of the process are investors that have been operating in Spain for a while. They all have their own recovery platforms and they have a vested interest in making a name for themselves in this market.
Who are the candidates?
Axactor arrived in Spain two years go. It is a Nordic group founded by former directors of Lindorff, one of the largest platforms in this segment in Europe, which in Spain controls Aktua and provides services to Sabadell and BMN. Like its fellow group from Norway, Axactor arrived in Spain chequebook in hand and within a few months had purchased several portfolios plus the business and team at Geslico, the former subsidiary of Lico Leasing.
Cabot is also an international recovery platform, based in the United Kingdom, and with connections to Encore, one of the largest global groups, itself based in the United States. Cabot established itself in Spain a couple of years ago and made its break with the acquisition of one of the largest servicers, Gesif.
Meanwhile, Link Finanzas is another British fund whose interest in Spain dates back even earlier than those of the other two investors. Link has been purchasing portfolios in the Iberian market for years. Last year, it consolidated its international presence with the purchase of the last vestiges of BBVA’s consumer business in Italy, for €100 million.
One of these three investors will be awarded the first portfolio to bear the El Corte Inglés brand. They are expected to submit their binding offers, which could amount to €15 million – €20 million, after Easter.
The latest data from Asnet and the CNMV reveal that Financiera El Corte Inglés is one of the market leaders by market share and profit, given that in 2016, it earned more than €66 million. Besides this portfolio, there are currently more than a dozen portfolios in the market, from the main entities in the country, including: BBVA, CaixaBank, Bankia, Liberbank, Ibercaja and Popular, amongst others.
Original story: Voz Populí (by Jorge Zuloaga)
Translation: Carmel Drake