Fifteen Days to Smooth Catalunya Banc´s Sale

16/05/2014 – Expansion

The Fund for Orderly Bank Restructuring (or FROB by its acronym in Spanish) has got two weeks for putting together three key puzzles in the sale of Catalunya Banc. Firstly, there is the banking business of the entity eyed by large banks that want to grow in Catalonia. Secondly, the sale of offices outside of the region for which Popular and Apollo have already submitted their offers. Thirdly, the delinquent mortgages reaching €7 billion worth targeted by large international vulture funds.

Frob and its advisor N+1 are currently working on the due diligence stage of the auction. The privatization will start in two, three weeks.

Three Spain biggest banks, Santander, BBVA and CaixaBank, appear as favourites.

With the deadline set at 28th May, funds may submit their non-binding offers for the €7 billion debt embraced by the “Hercules Project“. The soured mortgages require revision, re-consideration about their future management and possible cash flows.

Over 50%-off prices are taken for granted and the final amount to pay will probably reach 30% of the mortgages´nominal value, that is between €2-3.5 billion, while provisions oscilate around €2.5 billion.



Original article: Expansión (by Jorge Zuloaga)

Translation: AURA REE