Tag: KPMG

Bankia Puts 3,000 Foreclosed Flats Worth €500M Up for Sale

4 June 2019 – El Confidencial

Bankia has put another problem asset portfolio up for sale as it continues to take the Spanish real estate market by storm in 2019. Project Jarama contains 3,000 flats worth €500 million and is one of the bank’s largest operations involving foreclosed assets to date.

The bank chaired by José Ignacio Goirigolzarri has engaged KPMG to coordinate Project Jarama, which is complicated by the fact that more than half of the assets have not yet been fully repossessed by the bank.

In those cases, rulings have been made in the courts to award the property to the bank in exchange for the defaulted debt, but the entity does not yet hold the deeds or the keys, and the final stage of the foreclosure process could take several months in each case.

This sale forms part of Bankia’s strategy to accelerate its strategic plan. At the beginning of 2018, it set itself the target of divesting non-performing assets worth €9 billion from its balance sheet. By March 2019, it had already sold €6.5 billion.

In recent weeks, it has sold a €300 million portfolio to Blackstone and a €150 million portfolio to Cerberus and Kruk.

Original story: El Confidencial (by Jorge Zuloaga)

Translation/Summary: Carmel Drake

Bankia Entrusts the Sale of 3 NPL Portfolios Worth c. €1bn to KPMG

3 March 2019 – El Confidencial

Bankia is on course to fulfil one of the objectives of its strategic plan a year early. Two years ago, the entity set itself the target of divesting almost €9 billion from its balance sheet between 2018 and 2020, and last year alone, it sold problem assets worth €6 billion. With the sales forecast for this year, it is set to achieve its goal a year ahead of schedule.

In this context, the entity is launching the sale of three portfolios, worth around €1 billion, with the aim of selling them in the middle of this year.

The largest portfolio, worth around €500 million, comprises doubtful property developer loans; the next, worth around €200 million, contains unsecured debt; and the final one, worth several hundreds of millions, has yet to be defined. All three have been entrusted to KPMG for their sale.

Despite its huge efforts last year, Bankia still has around €8 billion in doubtful loans and €3 billion in foreclosed assets on its balance sheet.

Original story: El Confidencial (by Jorge Zuloaga)

Summary/Translation: Carmel Drake

Neinor & La Llave de Oro to Build 2 Residential Towers in Barcelona

10 October 2018 – Eje Prime

Neinor Homes and La Llave de Oro are joining forces to unblock two projects in Plaza Europa, L’Hospitalet de Llobregat. The property developers have jointly invested €20 million in the construction of two buildings that are going to add a total of 172 new homes to this municipality in Barcelona.

The construction of the buildings is going to be entrusted to Inbisa Construcción, which has already started work, expected to be finished within eighteen months. Neinor is going to develop one of the towers, which will contain 77 homes and which will be added to the development of 91 homes that the company led by Juan Velayos already has under construction in Plaza Europa. Meanwhile, La Llave de Oro will do the same with the second building, which will be 70m tall and will contain 95 homes.

These are two of the few plots that have not been developed yet in Plaza Europa de L’Hospitalet, an area focused primarily on the office market, which was first developed in 2007.

The area’s tenants include companies such as Inbisa, KPMG and GB Foods. Currently, the occupancy rate exceeds 85% with rents ranging between €14/m2/month and €16/m2/month, according to data from Savills Aguirre Newman.

Original story: Eje Prime

Translation: Carmel Drake

Meridia Capital Sell’s Nestle’s HQ in Barcelona for €87M

6 October 2018 – Real Estate Press

Savills Investment Management, the international real estate investment manager, has brokered the sale of Nestle’s headquarters in Barcelona by the manager Meridia Capital. The buyer in the operation is the Korean manager IGIS Asset Management. The value of the transaction has not been revealed, but sources close to the operation claim that it amounts to €87 million.

The complex, which includes 5 office buildings with a total surface area of almost 50,000 m2 and a GLA of 27,607 m2, is located in Esplugues de Llobregat, close to Avenida Diagonal in Barcelona. It is a prime location, where other large multinational companies also have their offices including Bayer, Cobega and Codorniu. The complex, which has been home to Nestle’s headquarters in Spain since the 1970s, has almost 600 parking spaces. Building 1 has a LEED 1 Platinum certificate and Building 2 and the common areas have a LEED Gold certificate.

Fernando Ramírez de Haro, Director General of Savills Investment Management for Spain and Portugal, said: “Our client has managed to access a complex with unique characteristics. At Savills IM, we are delighted to have been able to accompany them in this operation, which will undoubtedly mark a milestone in the real estate market during the second half of this year”.

In reference to Savills IM’s objectives in Spain, Ramírez de Haro added, “after closing this investment, which follows others recently completed in Spain and Portugal, we are close to recording total acquisitions of €500 million in 2018”.

Ashurst, Cushman & Wakefield, KPMG and Colliers advised the purchaser whilst the law firm Uría Menéndez and Valliance Real Estate Advisors acted as advisors to the vendor.

Original story: Real Estate Press

Translation: Carmel Drake

Alantra Finalises Acquisition of KPMG’s Financial Advisory Business

14 August 2018

Alantra Partners has finalised its purchase of KPMG’s division specialising in advising on loan portfolios and non-strategic bank assets, based in the United Kingdom.

The acquisition involved an investment of 2.8 million euros (2.26 million plus another 565,000 euros for ongoing KPMG operations) plus the assumption of €7.3 million by Alantra to finance the project.

With this purchase, Alantra will take on 35 professionals operating in diverse European markets that will strengthen its current workforce of more than 40 people who are already focused on credit portfolio and banking asset advisory.

The transaction, which was announced on July 11, was conditioned on compliance with certain requirements established in British legislation that have already been fulfilled, Alantra added in a statement sent to the National Securities Market Commission (CNMV).

Original Story: Expansión

Photo: Rafael Marchante – Reuters

Translation: Richard Turner

 

Axactor & Grove Compete to Acquire Sareb’s Largest NPL Portfolio

23 July 2018 – Voz Pópuli

The Norwegian investment fund Axactor and the US fund Grove, which is in the process of merging with the British firm Cabot, are competing to be awarded a non-performing loan portfolio with a nominal value of €2.335 billion by Sareb. The portfolio is the largest of its kind to be sold by the company chaired by Jaime Echegoyen (pictured below), according to financial sources consulted by Vozpópuli.

Sareb has recently received binding offers from the two aforementioned funds, as well as from Kruk, a Polish company specialising in debt recovery. Nevertheless, the proposal made by the latter was well below those submitted by the other two. According to the sources consulted, the Norwegian fund, which recently acquired a €900 million portfolio from Sabadell, as this newspaper revealed, looks to be the favourite to win the auction this time around.

The portfolio in question, which forms part of Project Dune, regarding which Sareb is being advised by KPMG, comprises unsecured non-performing loans. In fact, the assets are mortgage tails – loans that have not been repaid following the execution of their corresponding mortgage contracts – from small- and medium-sized property developers.

In this specific operation, the offers that the interested parties have presented reflect significant discounts, which may even amount to 99% of the nominal value of the portfolio, with the aim of trying to recover the maximum possible amount of the debt, which is no longer secured by any collateral.

Gains

In any case, whatever Sareb obtains for this portfolio will represent a gain for the entity, given that all of the loans, which are considered almost irrecoverable, have already been fully provisioned. The completion of the operation will happen in the month of September, at the earliest, according to the sources consulted.

Last week, Sareb shelved the block sale of between €20 billion and €30 billion in real estate assets due to the high cost of the operation. In fact, the Board of Directors of the entity known as the bad bank decided not to undertake that operation for the time being, due to the capital hole that the sale of those assets would have generated for the acquiring fund, which require higher discounts than individual investors.

That deal was called Project Alpha and Goldman Sachs had been working on it for months, to determine how, when and to whom the portfolio could be sold. Sareb was also supported in that deal by the consultancy firm CBRE and the audit firm EY (…).

Original story: Voz Pópuli (by Pepe Bravo)

Translation: Carmel Drake

Sabadell Sells €9.1bn to Cerberus & €2.5bn to Deutsche Bank

19 July 2018 – Voz Pópuli

Banco Sabadell is selling its property to Cerberus and Deutsche Bank. The Catalan entity has agreed with the US fund to transfer 80% of its foreclosed assets, worth €9.1 billion for €3.9 billion. And is finalising the sale of €2.5 billion in real estate loans proceeding from CAM to Deutsche Bank, according to financial sources consulted by Vozpópuli. The entities involved all declined to comment.

The agreement with Cerberus, which this newspaper revealed, includes two of the four large portfolios for sale: “Challenger”, containing assets from the bank – around €5 billion – and “Coliseum”, containing foreclosed assets proceeding from CAM and with public aid from the Deposit Guarantee Fund (FGD).

According to a statement filed with the CNMV, Sabadell values those two portfolios at €9.1 billion and is selling them to a new company for €3.9 billion, equivalent to 42% of the initial appraisal value. Cerberus will own 80% of the new company and Sabadell the remaining 20%, in such a way that the bank will receive around €3.1 billion. The sale requires provisions of €92 million. The Solvia platform was left out of the agreement.

Agreement with Deutsche Bank

Meanwhile, the agreement with Deutsche Bank is for Project Makalu, another of the four portfolios that Sabadell put up for sale. It already sold the first, unsecured, portfolio – Project Galerna – to the fund Axactor.

Of the four portfolios, this is the largest containing loans backed by real estate collateral. And it is protected by the public aid that Sabadell received for the purchase of CAM, at the end of 2011. For that reason, this operation, which may be signed in the next few days, requires the approval of the FGD.

Deutsche Bank has fought off tough competition from Oaktree and Lone Star to acquire this portfolio. The price of the operation could reach between €800 million to €900 million, according to market valuations. The advisor on the sale has been KPMG.

The German bank is one of the typical buyers of these types of portfolio, although until now, it had not purchased anything of this magnitude in Spain. Last year, it closed two operations, one with Sareb amounting to €400 million and the other with CaixaBank amounting to €700 million.

Balance sheet

Following the imminent agreement with Deutsche Bank, the divestment team at Sabadell led by Jaume Oliu and Simon Castellá will have transferred €12.5 billion in problem assets to Cerberus, Deutsche Bank and Axactor.

This latest acquisition by Cerberus is the fourth largest in history in Spain, behind the sale of Popular’s property to Blackstone – €30 billion; the sale of BBVA’s property to Cerberus – €14 billion; and the most recent sale of CaixaBank’s property to Lone Star – €12.8 billion.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Alantra Creates Leading European Advisor for Sale of Toxic Asset Portfolios

12 July 2018 – Expansión

Alantra has just signed a document that is going to make it the leading advisor to banks in Europe for the sale of toxic asset portfolios. The deal was signed yesterday in London and involves the purchase of KPMG’s international business specialising in those kinds of bank cleanups. The team comprises more than 35 professionals, mainly seniors, who will move across to form part of Alantra and who will take with them the sales mandates, worth €16 billion, that they are working on at the moment, according to sources at the firm.

After almost a year of negotiations with KPMG, the division is finally going to join forces with the investment banking team led by Santiago Eguidazu (pictured above) to create a new company with more than 75 professionals. The new company will be a subsidiary of Alantra and will be dedicated to advising banks regarding the best exits options for their portfolios of non-performing assets.

To date, Alantra has advised 80 operations in this business across five countries since 2014, for a total nominal value of more than €65 billion. Meanwhile, KPMG’s team has advised on more than 100 transactions worth €180 billion during the same period. The resulting company has averaged 45 transactions per year for the last four years and has advised an operation volume of more than €61 billion. The transaction will involve a cash disbursement for the Spanish firm of €2.83 million.

Banks and funds

The new division will be particularly active in the medium-sized transaction market generated by both banks and funds. The focus will be primarily on Europe, but also other countries around the world where the firm has a presence. In its activity, Alantra will compete above all with PwC, the other major player in the European portfolio business alongside KPMG, and with the US giants Morgan Stanley and Goldman Sachs for the largest contracts.

KPMG’s international team is headquartered in London, with local offices in Milan, Athens, Dublin and Lisbon. Alantra adds Madrid to that list, from where it has organised its global coverage of the portfolio business to date, which has seen it advise operations not only in Spain but also in Portugal, Italy, Greece and Eastern Europe.

The team at Alantra has been responsible for the sale of portfolios by almost all of the Spanish banks, ranging from Sabadell (with which it is working at the moment) to Santander, and including BBVA, CaixaBank, Bankia, Liberbank, Ibercaja and the domestic subsidiary of Deutsche Bank.

The current Head of Alantra’s Portfolio Business, Joel Grau, will lead the new subsidiary, together with Andrew Jenke and Nick Colman, from KPMG.

Global advice

Between the three of them, they will pursue the objective of replicating on a European scale the model that Alantra has been adopting in Spain, and which is based on providing global advise to banks from three perspectives: corporate operations, real estate (large properties and loans from financial entities, as well as those relating to shopping centres and hotels) and portfolios of toxic assets, according to sources at Alantra.

They will operate from two main centres: Madrid and London, where many of the funds that buy the banks’ portfolios are located and thanks to which the business is expected to soar, by reselling financial assets acquired or securitising them to put them on the market.

Original story: Expansión (by Inés Abril)

Translation: Carmel Drake

Project Galerna: Sabadell Sells €900M in NPLs to Axactor

29 June 2018 – Voz Pópuli

Sabadell has already completed the first phase of its investment plan. The bank chaired by Josep Oliú has agreed to sell a portfolio of non-performing loans amounting to €900 million to the Norwegian fund Axactor, according to sources at the funds involved in the process consulted by Vozpópuli.

The portfolio known as Project Galerna comprises mainly mortgage tails proceeding from CAM, which form part of the entity’s Asset Protection Scheme (EPA), and so the completion of the operation is conditional upon approval from the Deposit Guarantee Fund (FGD).

Loans that remain after the foreclosure of real estate credits are known as the mortgage tails. According to the sources consulted, the purchase of these types of assets – which tend to be fully provisioned (100%) by the entities, and so typically generate gains – tend to have discounts of between 95% and 97%, and so the offer from the Norwegian fund to acquire this portfolio could amount to between €25 million and €47 million.

In the bid to be awarded this unsecured portfolio, Axactor has fought off competition from other interested parties such as Lindorff and Kurk. The Norwegian fund arrived in Spain in 2015 and, at the end of 2017, purchased a portfolio of non-performing loans amounting to €436 million from Bankinter.

Sabadell’s macro-sale

The award of Project Galerna to Axactor, a process that KPMG is advising, represents the first step in Sabadell’s divestment plan, through which it is seeking to get rid of around €10.9 billion in non-performing assets before the summer.

As this newspaper already revealed, in addition to Galerna, the bank also has projects Challenger and Coliseum up for sale, operations that Alantra is advising, and which together contain €7.5 billion in foreclosed assets. Similarly, Project Makalu, which KPMG is advising, contains €2.5 billion in loans to property developers and SMEs.

Challenger is the only one of the four portfolios that is not subject to approval from the FGD. The other three are linked to CAM’s EPA and so their block sale would generate million-euro losses for the FGD, which will end up increasing its deficit.

Negotiations with the FGD

To avoid that, Sabadell – as well as BBVA – is negotiating with the FGD to transfer the portfolios to new companies created by the entity and the funds that they are awarded to. In this way, the losses would not be assumed until the new companies sell the assets in the market.

In order to offset these losses, Sabadell, as well as BBVA with respect to Unnim’s EPA, has offered the Deposit Guarantee Fund the option of assuming more than 20% of the losses of the EPAs.

Original story: Voz Pópuli (by Pepe Bravo)

Translation: Carmel Drake

Project Ágora: CaixaBank Sells €650M NPL Portfolio to Cerberus

21 June 2018 – Voz Pópuli

CaixaBank is getting serious with the digestion of its real estate. The Catalan bank has just closed its first major divestment of 2018 and is analysing another possible large-scale operation to be completed in the second half of the year, according to financial sources consulted by Vozpópuli.

The sale that has just been announced is Project Ágora, a €650 million portfolio whose transfer has been agreed with Cerberus. According to the same sources, the US fund and CaixaBank have already signed a pre-agreement and are now negotiating the small print of the deal. Cerberus could pay around €200 million, according to market estimates.

Project Ágora comprises around 150 unpaid loans from large companies backed by retail premises, offices, industrial land and residential assets.

Strategic revision

Following this sale, the market is expecting CaixaBank to close a macro-operation during the second half of the year. The repurchase of Servihabitat, announced two weeks ago, is seen as a preliminary step, since that is what Santander did with Aliseda before it sold Popular’s real estate to Blackstone.

The sources consulted indicate that no process is underway yet, although the entity is reportedly working on some numbers and doing some preparation work in that regard. The entity led by Gonzalo Gortázar (pictured above) is being advised by consultancy firms, including KPMG. The Madrilenian banker wants to know whether undertaking an operation such as Quasar (Popular-Blackstone) or Marina (BBVA-Cerberus) will require it to recognise any new provisions.

CaixaBank has €14 billion in foreclosed assets on its balance sheet, worth €5.8 billion. That represents a discount of 58%, according to its accounts for the first quarter. Santander sold Popular’s real estate at a discount of 67% and BBVA sold its assets at a discount of 62% (…).

Gortázar’s team wants to avoid the market fixating on CaixaBank following the sales undertaken by Santander and BBVA, and the operations that Sabadell has underway.

The commitment from Cerberus

With Project Ágora, Cerberus is continuing to grow its real estate business in Spain. The fund led in Spain by BBVA’s former Finance Director, Manuel González-Cid, already purchased a portfolio from CaixaBank at the end of last year – Project Egeo – and is completing the purchase of 80% of BBVA’s real estate for €4 billion. For this, the comments to be issued by the Deposit Guarantee Fund (FGD) in the next few weeks will be critical.

In addition to the portfolios that it has been buying, Cerberus has a large part of its Spanish real estate interests in Haya Real Estate. After trying, unsuccessfully, to debut that entity on the stock market before the summer, the fund is negotiating its key contract and/or a possible acquisition of assets with Sareb. The fund certaintly has a great deal at stake with that operation.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake