14/07/2014 – Expansion
Soros Fund Management, the investment vehicle of billionaire George Soros, withdrew from the auction of the soured loans of nationalized Catalunya Banc. Soros led among the five teams supposed to submit their binding offers for the €6.5 billion loan portfolio by Thursday. However, at the last moment, he decided to back out.
After the leave, Catalunya Banc and its main shareholder Frob (the Fund for Orderly Banking Restructuring) still have got four proposals on the table sent by the following fund alliances: Apollo, Centerbridge & Lone Star, Pimco, Marathon, Oaktree, Deutsche Bank & Finsolutia, Cerberus & Goldman Sachs and Blackstone & TPG.
Soros, bidding together with Värde Partners, counted on significant discounts on the troublesome loans.
The portfolio called the “Hercules Project” is compound of a €6.5 billion loan worth backed by 38.000 dwellings. Great majority of the credits are non-performing or had to be refinanced during the recession, therefore the funds demand at least a 50% price slash on the lot. Non-binding offers oscillated around €3.5 billion. Frob will co-invest in order to cover potential losses of the portfolio.
One of the most fearful competitors is the team of Blackstone and TPG. However, also Apollo, Centerbridge and Lone Star are on the velvet thanks to their previous purchases on the Spanish property market.
The Bet on Spain
Over the past months, the investor from the Wall Street has been one of the major asset purchasers in Spain. Soros bought holdings in FCC and in Hispania Real Estate and apart from that he took part in a capital increase at Liberbank.
The magnate owns a personal fortune valued at €16.88 billion.
Original article: Expansión (by Jorge Zuloaga)
Translation: AURA REE