Sareb Parks €20bn Asset Megasale Due to High Costs

20 July 2018 – Voz Pópuli

Sareb has shelved its megaplan with Goldman Sachs to sell between €20 billion and €30 billion. The bad bank’s Board of Directors has decided that it is not the right time for an operation of that kind, due both to the high costs that it would incur, as well as due to the period of reorganisation that the servicer sector is undergoing, according to financial sources consulted by this newspaper.

The US investment bank, led in Spain by Olaf Díaz-Pintado, has been conducting a detailed study regarding how, when and to whom it could sell this portfolio. For this study – known as Project Alpha – Sareb has also relied on the consultancy firm CBRE and the audit firm EY.

The findings were presented at the Board meeting on Wednesday, and received a cool reaction. No approval was given either for the block sale of the €20-30 billion, or of any part of it.

Impact on capital

One of the key points in the report is the capital hole that the sale of these assets would have generated for a large fund, which typically require greater discounts than individual investors. Goldman proposed improving the price, by giving the buyer an asset management contract, which would allow it to sacrifice future expenses in exchange for not consuming the capital of the bad bank.

Following the detailed study, the Board of Directors chaired by Jaime Echegoyen has decided to park the operation for the time being and to focus on other alternatives. The first is going to be what to do with the management contract that it has with Haya Real Estate, which expires next year and whose assets are the ones that Goldman Sachs has been studying the sale of. The maturity of Haya’s contract is the prologue of the other three servicers to work with Sareb, namely: Altamira, Servihabitat and Solvia.

Faced with these types of contracts, which were classified by asset origin, Sareb wants to segment its sales by province from now on, to join forces with specialist real estate firms in each region.

Before being shelved, Sareb had already been assumed that Project Alpha would be archived due to the change of Government, according to El Confidencial, and the intention of the new Government to undertake an audit of the bad bank.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake