Attica Bank on Thursday said Aldridge EDC, Speciality Finance (AEDC), submitted a binding offer in a tender to take over the management of non-performing loans worth 1.331 billion euros of the bank.
Seven candidates participated in the tender procedure, of which three were eligible with Attica Bank’s plan.
In an announcement, Attica Bank said this move will help the bank to restructure its loan portfolio and noted that the bank will secure revenue of 70 million euros (as envisaged in the adverse scenario of the latest recapitalization of the bank).
These loans are purely business and will not include first house mortgage loans nor loans received by citizens included in vulnerable social groups. Attica Bank sources told ANA that “this move was necessary to cover the bank’s capital adequacy, based on the adverse scenario. This way, Attica Bank’s balance sheet is definitely restructured and its capital adequacy and asset quality indexes will improve”. They added this was an innovative solution for Greek standards, approved by supervisory authorities.
Under the plan, Attica Bank will transfer this portfolio of NPLs to a special purpose company -with a seven year period contract- and the company will issue a series A bond (senior note) of a nominal value of 525.2 million euros and a series B bond (junior note) of a nominal value of 806.4 million euros.
Attica Bank also set up a liabilities management company, called “Goddess Artemis”, in which the investor will acquire 80 pct of its equity capital. Attica Bank will sell the junior note (worth 806.4 million euros) to the investor for 70 million euros. The junior note is covered with credit risk provisions. Attica Bank retains the right of collecting any sum -in priority- arising from the management of the senior note (worth 525.2 million euros).
The bank said its capital adequacy rate is estimated to rise to 17 pct from 14.8 pct at the end of 2016, safeguards the interests of shareholders by maintaining existing shareholder composition and avoiding dilution and achieves an efficient management of NPLs.
AEDC is based in the UK and has several years of experience in investments and complex transactions in the European market. AEDC holds around 48.1 pct of shares in DDM Holding, a Swiss-based company listed in the stock market with activities in the management of NPLs.