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ROME/MILAN Oct 23 (Reuters) - Unicredit is talking with a consortium comprising Fortress Investment Group and Italys Prelios on the sale of its bad loan unit Unicredit Credit Management Bank (UCCMB) and could soon enter exclusive talks.
Thats the way were leaning, CEO Federico Ghizzoni told reporters on the sidelines of an event, adding a decision could be taken on Thursday.
Fortress and Prelios are pitted against a group of investors led by US private equity fund Lone Star after UniCredit drew up a shortlist of bidders last month.
The sale, which could yield Italys biggest bank by assets more than 600 million euros ($758.5 million), would be the countrys biggest distressed debt sale for several years.
Ironing out the detail of the transaction is a complicated issue that is taking time, a source close to the deal said, adding the bank was discussing with the consortium about the industrial plan for UCCMB.
The winner would buy both UCCMBs business operations, or platform, and a bad loan portfolio worth more than 3 billion euros.
The unit for sale manages more than 40 billion euros of non-performing loans that belong to both UniCredit and to third parties. It has more than 700 employees and is based in the northern town of Verona.
Both UniCredits CEO and a top executive for Fortress have give assurances the sale would not impact employees, but unions are opposed to the transaction.
The sale is part of UniCredits plan to strengthen its balance sheet in light of the Europe-wide bank asset review, the results of which will be unveiled on Sunday.
In Italy non-performing loans rose to 173.9 billion euros in August, the highest level since the current statistical series began in 1998.
Banks, however, are finding it hard to shed bad loans as prices offered in many cases fall short of the book value of the assets, experts involved in some transactions said.
The completion of the euro zone stress tests could help unblock further bad loan deals, they said. (1 US dollar = 0.7910 euro) (Reporting by Alberto Sisto in Rome, with Gianluca Semeraro and Francesca Landini in Milan; Editing by David Holmes)
Poland-Lithuania continued to deliver good growth and reported a 28% increase in PBT to pound;21.4M which reflects strong underlying profit growth of pound;6.2M before absorbing pound;1.3M as a result of weaker FX rates and pound;0.2M of additional new market investment in Lithuania, where we achieved full national coverage in the quarter. Despite a competitive marketplace, customer numbers increased 2% year-on-year to 845,000 and credit issued and revenue grew by 5% and 9% respectively. We benefited by pound;4.7M from the sale of non-performing receivables in the quarter and expect to continue to do this on a regular basis to augment our debt recovery activities. Annualised impairment as a percentage of revenue improved by two percentage points since the half year to 27.7%.
Q3 PBT in Czech-Slovakia fell to pound;4.1M driven by a pound;3.8M reduction in the underlying profit and a pound;1.0M FX impact. The key factors driving the underlying reduction were continued strong competition and flat demand for credit in our market segment in the Czech Republic alongside regulatory changes in Slovakia, the disruptive effects of which have proved longer-lived and more extensive than initially anticipated. These factors resulted in a 2% contraction in customer numbers to 368,000, a 19% reduction in credit issued and annualised impairment as a percentage of revenue increasing to 30.8%. We have implemented incentives for field management and agents aligned to improving collections performance and have invested further in our central collections unit to support our field force. In Slovakia, we have launched a pre-paid card to deliver loans to customers, which will reduce loan delivery times and provide a competitive advantage. In both markets we have also implemented selective credit tightening to bring the impairment levels back within our target range.
Our Hungarian business delivered good underlying profit growth of pound;0.9M before absorbing pound;0.9M as a result of weaker FX rates. Growth was achieved by increasing customer numbers by 11% to 312,000 which drove credit issued growth of 11% and an increase in revenue of 13%. Annualised impairment as a percentage of revenue increased to 21.2% which reflects our strategy to grow the business supported by controlled credit easing, and remains well below our target range of 25% to 30%.
Our business in Romania-Bulgaria reported good PBT growth reflecting underlying profit growth of pound;1.9M before absorbing a pound;0.7M investment in Bulgaria and pound;0.2M as a result of weaker FX rates. We have implemented selective credit tightening and rebalanced operational incentives in order to bring impairment into our target range in the second half of the year. Annualised impairment as a percentage of revenue improved slightly to 32.0% in Q3 and is expected to deliver a further reduction in Q4. Notwithstanding these actions, customer numbers grew by 11% (to 314,000) whilst credit issued grew by 3%.
Mexico continued to achieve strong growth. Reported PBT increased to pound;3.7M and underlying profit grew strongly by pound;1.0M before absorbing pound;0.3M as a result of weaker FX rates. We were pleased to increase customer numbers by 7% to 781,000 alongside a 9% increase in credit issued and revenue growth of 18%. At the end of Q3 2014, annualised profit per customer was pound;22 (Q3 2013: pound;18). As a result of careful credit management, annualised impairment as a percentage of revenue improved to 29.4%. We continued to expand our footprint in Mexico City with the opening of a new branch. We launched our life and medical assistance insurance cover, Provident Plus, which has been taken by 34,000 customers since July.
We will launch our first digital loan proposition in Poland under the hapi loans brand before the end of the year. Developed as a separate operation to our home credit business model, we will be offering fair, transparent and competitively priced online loans with forbearance features to customers looking for a digital-only credit service. The initial phase of hapi loans will focus on Poland before we look to roll out across more of our other markets. This is an exciting new proposition that we expect will deliver significant incremental growth alongside our Provident brand.
Plans are progressing for our launch into Spain and we are on track to deliver our first loans to customers early next year.
As noted in our half year results announcement, Hungary will implement legislation limiting the proportion of an individuals income that may be spent servicing consumer credit (50% to 60% depending on income level). We will adapt our product offering and will be compliant with the new legislation by the required date.
The Polish Ministry of Finances proposals relating to caps on mandatory non-interest charges for credit and default charges still await approval in parliament. We continue to believe the legislation will become effective in Q2 2015. We continue to await a date for the court appeal process to begin when we will challenge UOKiKs decision made in December 2013 in respect of APR calculations. UOKiKs review into the way loan fees are calculated by a number of non-bank consumer credit providers is ongoing and we are continuing to work with UOKiK to explore alternative charging methodologies.
We do not currently expect any of these matters to have a material impact on our business.
Funding and balance sheet
In September, we renewed pound;100M of bank facilities due to mature in early 2015. The new facilities mature in the second half of 2017, further strengthening our funding position. Unamortised arrangement fees of pound;0.7M will be recorded as an exceptional refinancing cost.
Our on-market share buyback programme of pound;50M to help reset the capital ratio to around 45% is progressing and at the end of September, we had bought back pound;31.6M of shares and the equity to receivables ratio was 48.7%.
The following table shows the YTD performance of each of our markets.
AnaCap Financial Partners said Thursday it has bought a EUR1.9 billion (US$2.4 billion) portfolio of non-performing loans from UniCredit Group. The portfolio primarily consists of secured and unsecured bankruptcy and other enforcement claims, AnaCap said. London-based AnaCap, a specialist PE firm, invests in the European financial services sector.
AnaCap Financial Partners LLP ("AnaCap"), the specialist European financial services private equity firm, has announced the successful completion of the acquisition of EUR1.9 billion non-performing loans ("NPLs") from Italian lender UniCredit Group. Under the terms of the agreement, funds advised by AnaCap will acquire the portfolio.
The portfolio primarily consists of secured and unsecured bankruptcy and other enforcement claims. A significant portion of the portfolio will continue to be serviced by UniCredit Credit Management Bank, with the management of a portion of claims migrated to third parties. Investments completed with UniCredit in 2013 also paved the way for this transaction, establishing a strong partnership between the seller and incumbent servicing partner.
The latest transaction is among the largest of its kind in Italy to date.
It is estimated that there is currently EUR800 billion of NPLs on the balance sheets of European banks - more than double the level seen in 20091 - which along with other non-core legacy assets continue to tie up capital and liquidity which may be more profitably allocated elsewhere. Further flows of new credit are vital to help encourage renewed lending and ease the pressure of illiquidity throughout the region.
AnaCap has now purchased over EUR4.5bn claims in Italian NPLs over the past two years along with a EUR550m performing portfolio of Italian salary guaranteed loans. The acquisition marks the continuation of a highly active period for AnaCap more broadly in Europe as well, including the recent acquisition of a EUR495 million portfolio of NPLs from Volksbank Romania.
Justin Sulger, a Partner at AnaCap, commented:
"We are delighted to have completed this acquisition, emphasising our commitment to helping rebuild the European financial services sector by establishing strong partnerships with institutions like UniCredit. We remain highly confident in our ability to continue to deploy capital in a wide range of credit opportunities across the continent, harnessing broad based expertise in financial services, including a deep understanding of consumer, SME and mortgage debt in local markets."
For Immediate Release
16 October 2014
The parties were assisted by two law firms, Paul Hastings LLP, on the UniCredit SpA side and NCTM LLP on the AnaCap side.
1International Monetary Fund, Financial Stability Report, April 2014
MCLEAN, Va., Oct. 15, 2014 (GLOBE NEWSWIRE) -- Gladstone Capital Corporation (Nasdaq:GLAD) (the Company) reported today that Zoltan Berty has joined the Company as a Managing Director in our Los Angeles office and will lead our West Coast efforts focusing on originating debt investments in privately held companies. Prior to joining the Company, Mr. Berty was a Principal at Caltius Mezzanine, a mezzanine fund focused on junior capital and minority equity investments in middle market companies. Prior to this, Mr. Berty was a Vice President at D. E. Shaw Direct Capital, where he was responsible for originating new investment opportunities across all levels of the capital structure, including senior debt, mezzanine and equity. Previously, Mr. Berty was a Director at CapitalSource and focused on senior and subordinated debt investment to support buyout and recapitalization transactions. Mr. Bertys earlier lending experience also includes credit management and underwriting positions at Transamerica Technology Finance and Fleet Capital Corporation. Mr. Berty received his BS in Accounting from the University of Southern California.
With over 20 years of experience originating, structuring, and underwriting leveraged finance and mezzanine transactions for middle market borrowers, Zoltan is a natural fit for Gladstones middle market focus and we are excited about him being a part of the team, said Bob Marcotte, President.
Gladstone Capital Corporation is a publicly traded business development company that invests in debt and equity securities consisting primarily of senior, second lien, and senior subordinate term loans in small and medium sized businesses in the United States. The Company has paid 132 consecutive monthly cash distributions on its common stock. Prior to paying distributions on a monthly basis, the Company paid 8 consecutive quarterly cash distributions. The Company has never skipped a monthly distribution since inception, over 13 years ago. Information on the business activities of all the Gladstone funds can be found at www.gladstonecompanies.com.
For Investor Relations inquiries related to any of the monthly dividend paying Gladstone funds, please visit www.gladstone.com.
CONTACT: Gladstone Commercial Corporation: +1-703-287-5893
Source: Gladstone Capital Corporation