4 September 2015 – El Confidencial
Fortress dismisses most of the Lico staff after the failed sale to Apollo.
The American fund has announced the third record of employment regulation in the financial holding company which it bought from the savings banks to compete in granting credits.
Fortress admits defeat in Spain in its attempt to compete with banks in lending to small and medium enterprises. US fund, which requested a license from the Bank of Spain to operate as a credit institution, following the purchase of the financial holding company from the savings banks, announced this Thursday its plans to dismiss most of the staff in the face of inability to make Lico Leasing Division profitable.
Several sources have confirmed the announcement made by Fortress to about 130 employees still working in this subsidiary, which was part of Lico Corporation, the financial group controlled by the Spanish Confederation of Savings Banks (CECA) until its demise due to bankruptcy and absorption of these entities left this company in the hands of banks.
Opportunistic fund bought the holding in 2013 for about 220 million euros, keeping all business and staff, in order to take advantage of economic recovery and the new demand for credit. But the investment has not gone as expected, that is why Fortress commissioned N + 1 to search for a buyer among others of the distressed funds who also had landed in Spain looking for bargains.
Opportunistic fund bought the holding in 2013 for about 220 million with the objective of taking advantage of economic recovery and of the new demand for credit.
In July, Fortress and Apollo reached a preliminary agreement for the transfer of the business. But at the time of the final signing, the entity that manages the NPLs of Banco Santander, Bankia’s Finanmadrid and part of the office network Abanca (renamed to Evo Bank), backed down. Apollo’s refusal has led to the start of the extinguishment of employment procedure, which will now begin negotiating with the workers.
Other sources indicate that this decision means the prelude to the liquidation of this subsidiary, an extreme step denied by those close to the fund. At the same time they assure that Fortress will continue in Spain with its business recovery of Geslico, which already applied for another record of employment regulation earlier this year, real estate and alternative investments.
The recent history of Lico Leasing demonstrates how these opportunistic funds work. Fortress bought it in 2013 for about 220 million euros after its shareholders – BBVA, La Caixa, Bankia, Unicaja, Sabadell, BMN and Kutxabank, among others – put it on sale after inheriting it from CECA (Confederation of Spanish Savings Banks). Soon, the fund presented a record of employment regulation (ERE) for 174 of the 450 employees of Lico Corporation.
Subsequently, it sold the credit portfolio to Goldman Sachs, which it had bought for a knockdown price, and handed over the local landmark office in Barcelona, located in the Windsor building on Avenida Diagonal, to Miguel Durán, the former president of the ONCE .
Original story: El Confidencial
Translation: Lee La