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.


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

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