Apollo Negotiates the Sale of Altamira to Dobank (Fortress) for €500M

21 December 2018 – El Confidencial

The sale of Altamira, the historical real estate arm of Banco Santander, is facing its most decisive moment. The Italian group Dobank has positioned itself as the primary candidate in recent days to purchase the platform owned by Apollo and Santander, amongst others, by submitting an offer for between €500 million and €550 million, according to financial sources consulted by El Confidencial.

The offer is somewhat lower than Apollo and its other two partners in Altamira’s share capital, the Canadian pension fund CPPIB and the Abu Dhabi fund ADIA, had expected. Between the three of them, they control an 85% stake, whilst the remaining 15% is in the hands of Santander.

The shareholders engaged Goldman Sachs to coordinate the sale with the aim of obtaining proceeds of €600 million. Nevertheless, the lack of competition has decreased the price in recent weeks. The deal was also influenced by the withdrawal of Intrum, which decided not to buy Altamira after winning the bid to acquire Solvia, according to the same sources.

That price difference means that Apollo and Goldmans are taking their time over the completion of the operation. Apollo, CPPIB and ADIA paid €664 million for the 85% stake in the real estate firm back in the day. Despite that, they do not have to reach that figure to recover their investments, given that they have received various dividends in recent years that compensate their profitability figures.

Dobank is the Italian platform owned by Fortress, the US fund that used to operate in Spain in the recovery of financial assets, through Paratus, Geslico and Lico Corporación.

The platform has been interested in entering the Spanish market for a while and regards Altamira as the ideal partner, given that it is the property manager that has been the most committed to internationalisation. It already operates in Portugal, Cyprus and Greece and the next major market into which it wants to expand is Italy.

Santander has not yet decided what it will do with its 15% stake in Altamira, whether to sell it together with the stakes of the other shareholders or to hold onto it to retain some control over the future of the platform, which still manages some of its assets.

Original story: El Confidencial (by Jorge Zuloaga)

Translation: Carmel Drake

Ministry of Economy Suspects Fortress of Money Laundering at Purchase of Lico Leasing

29/09/2014 El Confidencial

Fortress, a vulture fund that made a real deal on buying non-performing loans and unpaid debt in Spain, is now being interrogated by Money Laundering and Monetary Offences Prevention Commission of Spain (abbreviated to Sepblac), a department of the Ministry of Economic Affairs.

The authority demands a report on the identity of investors who put the equity for purchase of a financial division of savings banks – Lico Leasing. According to a notice sent by the Ministry, Fortres is obliged to prove internal proceedings applied to prevent money laundering and terrorism financing.

The investigation of Spain’s Central Bank has been triggered after finding out that the eleven affiliates through which Fortress is going to acquire Lico are based in Delaware (the U.S.A.) and the Cayman Islands – tax paradises witnessing transfers of money of suspicious origin. Most of the European countries excluded these murky areas in order to avoid tax evasion.

The transaction is going to be sealed through Valdivia Leasing Limited, a newly created Irish holding owned by some investment funds managed and controlled by Fortress Investment Group. Lico Leasing belonged to BBVA, Banco Sabadell, Mapfre, Ibercaja, Unicaja, CECA, Novagalicia, CatalunyaCaixa and Bankia.

Among the vehicles of Fortress supposed to pay €127.26 million for Lico, one may find Fortress Credit Opportunities Fund III and its five arms named A, B, C, D, E, as well Super FCO MALP,  FCO MA Centre Street and Worden Master Fund. The Ministry of Economic Affairs wants to know who really stands behind these funds. ‘The report must include information about banking entites, accounts and countries or jurisdictions through which the final equity injection will be done, from the beginning to the end’, Sepblac explains.

A Controversial Fund

Not only has Fortress acquired Lico Leasing but also Geslico, a debt collection affiliate for €220 million. Another noteworthy operation by the fund was the purchase of delinquent portfolios from Banco Santander for €1.1 billion in 2012. Furthermore, Fortress has become the principal lender of Realia by buying a €540 million debt share from Santander, CaixaBank, BBVA and Sareb.

Vulture funds like this one have transformed themselves into new owners of heaps of unpaid loans – estimated at €50 billion – proceeding from Spanish banks balance sheets, transferred at price much lower than their face value.


Original article: El Confidencial (by Agustín Marco)

Translation: AURA REE

Fortress acquires Lico, the ruinous company from the savings Banks, for 200 million Euros.

Fortress, one of the opportunistic funds which has hunted more preys in Spain, has closed the acquisition of Lico Corporación, the group of financial services owned by the savings banks. The operation has been closed for an operation slightly below 200 million Euros after the approval of the general shareholder´s meeting, in spite of the reservations of some partners.

As confirmed by sources close to the transaction, the shareholders of Lico Corporación approved last Wednesday the transfer of all their assets and liabilities to Fortress, which had been negotiating the acquisition since the spring. This fund has won the bid over Pepper Investment Management, another fund of Australian origin managed in Spain by Enrique Marín (ex-Lehman Brothers) and who had presented an offer of collaboration with Goldman Sachs.

As advanced by El Confidencial at the beginning of June, BBVA and Sabadell, who had become shareholders of Lico Corporación by accident after acquiring Unimm and CAM, obliged the savings banks who historically had been in the capital to sell the firm. The losses of the last years – more than 80 million Euros – had forced them to contribute with fresh funds in order to avoid a patrimonial imbalance.

In view of the pressure of Francisco González and Josep Oliu, presidents of BBVA and Banco Sabadell, respectively, the rest of shareholders – Liberbank, Caja España, Banco Mare Nostrum, Unicaja, Novagalicia, Kutxa, Mapfre, Bankia, Caja 3, Catalunya Banc and Ibercaja and the Spanish Confederation of Savings Banks- decided to empower Société Générale to look for a buyer.

The decision to sell Grupo Lico was taken only five months after the dismissal program carried out by Lico Leasing, one of the biggest subsidiaries of the holding, which affected 43% of the staff made of slightly more than 200 employees. This downsizing meant a cost of six million Euros in compensations, a sharp adjustment through which all partners of the Spanish Confederation of Savings Banks, the main shareholders, wanted to adapt “its production capacity to the current scenario of economic activity.”

Fortress will do it now, as with this acquisition it assumes a platform that will manage the 3.000 million Euros in financial assets it has been acquiring in the last few years. One of the more important operations was the agreement with the Banco Santander to assume a portfolio of default personal credits of 1.100 million Euros. A transaction for which it paid 55 million Euros, as it acquired it with a discount of 95% on its value in books.

Lico Corporation, with assets of 745 million Euros, is the mother company of Grupo Lico, which was founded in 1988, twenty-five years ago. The holding is made of 21 companies that operate in the businesses of leasing, factoring, confirming, renting, corporate financing, collection of payments, valuation of portfolios, mediation in private insurances and real estate investment. However, the origin of the institution goes back to 1966, when Mapfre created Leasing International Company, a company which was entered by the savings banks in 1977.

The arrival of Fortress means some fresh air for Lico Corporación, whose accounts had already arisen some suspicions in the auditors. Deloitte warned in its last report against some “existing uncertainties on the capacity of the group to continue its operations”. Some of the factors of this doubt were the continuous fall of the volumes of new financing awarded by its depending institution Lico Leasing, as well as the amount of very significant losses; the great cash and credit restriction problems in the whole banking system.

An environment that made it difficult to “renovate the credit lines, so that at the end of the year nearly all the financing of the Group was the one agreed with its shareholders.”(…)