Greece’s Alpha Bank chooses Davidson Kempner as bidder for £10.8 b Galaxy bad loans
LONDON/ATHENS (UK/GREECE) – In a bid to buy a $12 billion portfolio of non-performing loans, Greece’s Alpha Bank has selected US investment fund Davidson Kempner as its preferred bidder. It will be the country’s largest-ever sale of bad debt.
Christened Galaxy Project, the portfolio is worth 10.8 billion euros ($12.81 billion) and it also includes the disposal of Cepal, which is the Greek lender’s bad loan servicing unit.
After trumping a rival deal by US investment behemoth Pacific Investment Management Company (PIMCO), Davidson Kempner has valued the assets at about 290 million euros.
The sale is slated to be finalised by the end of the year and it is the most significant attempt by a Greek bank to clean up its balance sheet in the wake of concerns that the proportion of soured loans to businesses and individuals will spike because of the pandemic crisis.
Greece has the highest bad-loans ratio in the European Union.
The sale is slated to bring down the bank’s non-performing exposure (NPE) ratio to 24% from 43% and its non-performing loan (NPL) ratio to 13% from 30%.