The sale of the bad bank of NCG Banco enters its decisive stage. The Galician institution has filtered the first offers of the interested funds and has designated two finalists, the funds Fortress and Lindorff, to whom a third investor could be added.
The US managing company and the Norwegian recovery platform will start analyzing in the next few days the assets on sale and will need to present their definite offer in the first half of July, according to financial sources.
The sale could be delayed a few weeks from the initial plan due to the complexity of the assets on sale. The operation, known as Project U2, includes the properties that were left outside the bad bank (Sareb); the recovery unit of NCG; the branches outside Galicia that were not included in EVO Banco; a debt management agreement for more than 20.000 million Euros; and part of the central services.
In total, the winner of this auction, which is being coordinated by the Italian group Mediobanca, will retain 30 branches; a team of 700 people; real estate assets for 250 million Euros; and the management agreement.
NCG Banco values that jobs are maintained that the buyer has a broad experience in the recovery market in Spain.
One of the points to be defined in the operation is if the institution that keeps the Single Asset Management Unit (SAMU) from NCG, will also manage the assets transferred to Sareb. The Galician institution transferred 5100 million Euros in properties and credits linked to the construction business.
From these two candidates, the Norwegian group Lindorff is the one that has bet on Spain in the last few years. This institution bought the recovery platform from Santander, Reintegra, between 2011 and 2012, with more than 700 professionals included in the operation. This institution has also reinforced itself with the acquisition, along with the fund AnaCap, of default credits from Popular for 1143 million Euros.
On the other hand, Fortress has not closed any operation in Spain since the sale of 1000 million Euros in default credits from Santander, Banesto and Santander Consumer Finance, at the beginning of 2012. This is why, according to financial sources, “it has more ammunition to buy banking assets in the next few months”. This US fund negotiated to enter Sareb´s capital, along with Cerberus and Centerbridge, and it is seen as one of the firmest candidates to buy lots of real estate assets in Spain.
The offers of these new investors have won over those of at least six funds or financial institutions: EOS, the German group that acquired recently the recovery platform from Popular; GFKL, the German fund whose subsidiary in Spain is Multigestión; Deutsche Bank; the technological group IBM; WL Ross, from the US millionaire Wilbur L. Ross; and Centerbridge, the US management company that acquired the recovery business of Banesto.
NCG Banco has decided that the offers of these funds did not fit in with their business plan.
NCG still needs to negotiate with Lindorff or Fortress the duration of the management contract of the credits of the group. It should be between five and ten years.
The 30 branches can be used to maintain the already existing business, but the buyer of SAMU will not be able to provide credit nor liability, based on the ban by Brussels.
These branches have the worst quality business of the Galician saving banks outside Galicia, Asturias and Leon, in those regions where it arrived later and where it grew more disproportionally.
The branches with quality assets and more trusted customers outside Galicia were placed in EVO Banco, a subsidiary whose sale has also been negotiated in the last few weeks.