Lloyds took a next step in the process of share abatement in order to transfer its loans portfolio of the property developer companies in Spain to the fund Colony Capital for 215 million Euros.
The transfer affects the credits Lloyds was granted before the crisis, for the construction of two office buildings and a shopping mall in Madrid and Murcia. (…).
Sources close to Colony Capital claim that the investment has been carried out with “a significant discount” on the loan nominal value. Althought the property owners are not in insolvency process, such risk could be driven in the future.
Colony Capital is already known in Spain, as a main creditor of Inmobilaria Colonial and an owner of the premises of Alcatel in Madrid. It is one of the investment companies buying assets at low price in Spain in hope of capitalizing them when the economy recovers.
Likewise, Lloyds keeps on closing the non-strategical businesses to focus on its banking business in the United Kingdom. In April, the company transfered its Spanish branches to Banco Sabadell in exchange for the bank´s shares worth 84 million Euros. Due to the operation, Lloyds´s portfolio on the Spanish market tapered down to 2.828 millions of pounds (3.390 million Euros), before the loans sale to Colony.
The operations in Spain are merely a part of restructuring project that António Horta-Osório undertook in Lloyds in 2011. Since then the entity has sold or depreciated assets for 130.000 million pounds strengthening its capital position by 10.000 million pounds. The Spanish Antonio Lorenzo who, together with Horta-Osório from Santander UK moved to Lloyds, is in charge of th group restructuring and has executed 70 sales operations. (…).
Only yesterday the entity sold a mortgage portfolio in Ireland to Apollo Global Management for 257 million pounds (305 million Euros). Last week the loans portfolio of the property developer companies in Germany and Scandinavia was acquired by Cerberus, which paid 1.094 millions. Lloyds also broke ties with the fund manager Scottish Widows, the private banking company St James’s Place and its subsidaries in Australia and Japan.
The most costly transaction for the British entity is the sale of 630 offices in the UK. (…).