Alpha Bank-Eurobank create management company for troubled loans

In cooperation with the US private equity firm KKR and the European Bank for Reconstruction and Development (EBRD), Eurobank and Alpha Bank have created a joint company for managing troubled loans from large businesses.

KKR, through its subsidiary company Pillarstone Europe, will create a Greek company for managing troubled loans in which it intends to participate with a stake of 5%. The management company will be based in Greece, and will be licensed to operate by the Bank of Greece, according to the recent law on managing non-serviceable loans in Greece.

The initial loan portfolio will be valued at €1.2 billion with a 50%-50% participation from the two banks, and its composition will be agreed upon by the Management Company and KKR.

Eurobank and Alpha Bank will continue to write down loans in their statements, as they are not to be sold, but only managed by the management company.

This process will not negatively affect the banks’ capital. The transaction structure is such that it allows the participation of other Greek banks in the venture at a later time.

Source: InCyprus