Tag: Real Estate Transactions

Bankia sells Finanmadrid and a portfolio of 870 million Euros to Apollo.

Bankia continues with its disinvestments. The bank presided over by José Ignacio Goirigolzarri closed the sale of its consumer credit subsidiary, Finanmadrid, and a portfolio of credits of 870 million Euros to the fund Apollo.

This is the biggest operation ever by an American investor in Spain. This agreement, advised by Arcano and Linklaters, includes the transfer of 124 employees who make up the platform of Finanmadrid. Bankia is also working on the reduction of its staff with the transfer of employees.

The bank is also studying the sale of the platform Bankia Habitat, with 500 employees. The institution valued the the sale of Finanmadrid in 1,6 million Euros, although this amount only includes the transfer of the platform and not the credit portfolio, according to financial sources.

The package of credits would be made of nearly 700 million Euros in up-to-date loans, and another 170 million Euros in default loans. These last ones will be paid with discounts of 95%. Meanwhile, the existing credit is bought with an average discount of 20%. If these figures are maintained, the price of the operation as a whole (platform plus credits) would reach more than 500 million Euros.

This disinvestment is one of the commitments reached by Bankia with Brussels. The operation will generate a positive impact on the group´s capital of 10 million Euros. For Apollo, it will mean the reinforcement of its presence in Spain and the chance to become a competitor within the segment of consumer credits.

Source: Expansión

Oakwood acquires the Spanish company Vesta.

Oakwood Global Finance, an institution specialized in the management of non performing credit portfolios (already default) and assets, has expanded its operations to the Eurozone with the strategic acquisition of the Spanish company Vesta Asset Management, devoted to the management of credit portfolios and assets.

Vesta manages currently 65.000 loans with a total value of 500 million Euros comprising residential mortgages and consumer credits with no guarantees that have been totally repaid.

After the acquisition of Vesta, the assets being managed by Oakwood surpass 3500 million Euros.

Source: Expansión

More than 20 funds bid for Bankia Habitat in order to manage assets from Sareb.

More than 20 international funds and asset management companies have shown an interest in the operation and are planning to present a non binding offer next week, according to sources aware of the negotiation which have been enquired by Expansion.

Bankia would like the sale to be closed by the beginning of May. The operation includes the platform and team, made of more than 500 professionals, whose departure would decrease the global number of layoffs to be done by the company presided over by José Ignacio Goirigolzarri in the next few months, estimated at 4500 employees.

The winner in this auction will continue providing the services of Bankia Habitat to the financial group, which holds real estate assets and developers credit for 5500 million Euros. It also seems it will be the one in charge of managing the assets transferred by the institution – Bankia as well as BFA – to Sareb at the end of 2012, valued at 22300 million Euros. Nevertheless, sources close to the operation point out that this last fact depends on the offer and on the negotiations with Sareb.

Recurring income

This volume of assets represents nearly half of the 51000 million Euros of the bad bank and they would generate a recurring income through the commissions paid by Sareb, close to 0,2% only for managing the assets.

The Operation Platform is seen within the sector as a launch pad for foreign investors, to enable them to take positions for the acquisition of other assets and provide services to third parties. The bad bank is among these potential investors, as it has delegated the management to the nationalized institutions only during the first years. A management bid will take place later. This is why the sale of Bankia´s platform has awaken so much interest.

The operation will include the management and at first, not the transfer of real estate assets which continue to be in Bankia. The institution has currently 2900 million Euros in awarded properties and 2600 million Euros in developers credits, 3,3% of the total credit of the group. Before the transfer of assets to Sareb this percentage reached 17%. A part of these 5500 million Euros originate in the awarding of assets in 2013 and mostly of those assets which were not transferred to the bad bank as they did not exceed the limits: 100.000 Euros for properties and 250.000 Euros for credits.

Interested funds

Among those interested in the offer there are the main international investment funds, which have been looking for business opportunities in Spain for the last year. There are, in fact, many potential buyers from countries that have already carried out deep restructuring processes, as a consequence of the crisis. One of the entrance barriers to the promotion of this business in Spain is finding the right people to do this job, but Bankia Habitat has a very powerful team with a great performance in a very complex situation within the real estate sector.

Until now, these funds have focused on the acquisition of consumer credit portfolios, where normally institutions and investors reach economic agreements easier. This is why the Operation Platform is so original. Among those investors most interested in real estate assets there are Morgan Stanley, Cerberus, Fortress, Apollo, Oaktree or TPG.

Several management platforms are also analyzing the operation. Santander overtook its competitors by assigning the recovery management to a third party through the sale to the Norwegian group Lindorff two years ago. And Banesto did exactly the same with Centerbridge. But they will not be the only ones. This business is no longer considered core and many institutions will end up outsourcing this service.

Source: Expansión