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MarketScreener Homepage  >  Equities  >  Athens Stock Exchange  >  Alpha Bank A.E.    ALPHA   GRS015003007

ALPHA BANK A.E.

(ALPHA)
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Exclusive: Alpha Bank picks Davidson Kempner as preferred bidder for $12 billion Galaxy bad loans - sources

11/21/2020 | 01:22am EST
FILE PHOTO: A man withdraws money at an Alpha Bank branch ATM in central Athens

LONDON/ATHENS (Reuters) - Greek lender Alpha Bank has selected U.S. investment fund Davidson Kempner as its preferred bidder to buy a $12 billion portfolio of non-performing loans in what will be Greece's largest-ever sale of bad debt, sources told Reuters.

The portfolio, known as Galaxy Project and worth 10.8 billion euros ($12.81 billion), also includes the disposal of Alpha's bad loan servicing unit, Cepal.

Davidson Kempner has valued the assets at about 290 million euros, trumping a rival offer by U.S. investment giant Pacific Investment Management Company (PIMCO), one of the sources said.

Alpha Bank declined to comment while Davidson Kempner and PIMCO were not immediately available.

The sale, which is expected to be finalised by the end of 2020, is the most significant attempt by a Greek bank to clean up its balance sheet amid fears that the proportion of soured loans to businesses and individuals will surge as a consequence of the COVID-19 crisis.

Greece has the highest bad-loans ratio in the European Union.

Banks offload bad debts, normally at a fraction of their face value, to free up their balance sheets to make new loans and keep both their own business and economies going.

The sale of the Galaxy portfolio is expected to reduce Alpha's non-performing exposure (NPE) ratio to 24% from around 43% and its non-performing loan (NPL) ratio down to 13% from 30%, a banking source familiar with the deal said.

Alpha launched the process early this year, drawing initial interest from a series of bidders including Italian firms Cerved and Credito Fondiario, the sources said.

But only Davidson Kempner and PIMCO made binding offers and advanced to the final stages of the auction, with Alpha's board selecting Davidson Kempner as its preferred bidder after a board meeting on Friday.

Cepal, with a headcount of about 900, will be servicing the portfolio of bad loans that Davidson Kempner is expected to buy, in addition to non-performing loans of other parties. It currently services a little under 30 billion euros of impaired loans.

Alpha Bank, which initially held only 40% of Cepal, took full control of the platform in July from Centerbridge.

"Cepal is the main prize for this deal as the new owner will be entitled to the annual servicing fees that Cepal generates," one of the sources said.

Another source said Davidson Kempner's bid came with an attractive earn-out scheme and limited contractual protections.

The decision to negotiate a deal with Davidson Kempner could be announced early next week, the sources said.

It follows a similar transaction by Greece's Eurobank to sell 80% of its loan servicing unit FPS to Italian debt recovery firm doValue along with a chunk of mezzanine and junior notes from a 7.5 billion euro bad loan securitization known as Project Cairo.

Alpha Bank has applied to fold Galaxy into a Greek government scheme, dubbed Hercules, which provides state guarantees on the senior tranches of the securitisation.

(Reporting by Pamela Barbaglia in London and George Georgiopoulos in Athens; Editing by Diane Craft and Matthew Lewis)

By Pamela Barbaglia and George Georgiopoulos


© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
ALPHA BANK A.E. 0.85% 0.711 Delayed Quote.-63.34%
CERVED GROUP S.P.A. -1.62% 6.675 Delayed Quote.-21.97%
DOVALUE S.P.A. -1.31% 9.03 Delayed Quote.-25.61%
EUROBANK ERGASIAS S.A. 3.79% 0.4979 Delayed Quote.-46.88%
All news about ALPHA BANK A.E.
08:11aALPHA BANK A E : New appointments to Alpha Bank's Executive Committee
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11/25ALPHA BANK A E : Nine Month 2020 results
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11/23ALPHA BANK A E : picks Davidson Kempner as preferred bidder for $12 billion bad ..
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11/23ALPHA BANK A E : Announcement
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11/21EXCLUSIVE : Alpha Bank picks Davidson Kempner as preferred bidder for $12 billio..
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11/20Alpha Bank picks Davidson Kempner as preferred bidder for $12 bln Galaxy bad ..
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11/18ALPHA BANK A E : Binding bids submitted for Galaxy Transaction
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11/18ALPHA BANK A E : applies for the Hercules Asset Protection Scheme regarding the ..
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11/18ALPHA BANK A E : Availability of documents to the Shareholders
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11/02ALPHA BANK A E : Greece's Alpha Bank receives two bids for bad debt portfolio
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Financials
Sales 2020 2 194 M 2 616 M 2 616 M
Net income 2020 143 M 170 M 170 M
Net Debt 2020 - - -
P/E ratio 2020 8,02x
Yield 2020 -
Capitalization 1 088 M 1 296 M 1 298 M
Capi. / Sales 2020 0,50x
Capi. / Sales 2021 0,56x
Nbr of Employees 10 530
Free-Float 88,9%
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Technical analysis trends ALPHA BANK A.E.
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Mean consensus OUTPERFORM
Number of Analysts 13
Average target price 1,01 €
Last Close Price 0,71 €
Spread / Highest target 170%
Spread / Average Target 43,9%
Spread / Lowest Target -29,1%
EPS Revisions
Managers
NameTitle
Vassilios E. Psaltis Chief Executive Officer, Director & GM
Vassilios T. Rapanos Non-Executive Chairman
Spyros Nicolaos Filaretos COO, Executive Director & General Manager
Lazaros Papagaryfallou Chief Financial Officer & General Manager
Spyridon P. Tzamtzis Manager-Information Technology
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