Novo Banco sells €1.7Bn of default assets to KKR fund

 In Banks

Part of the largest portfolio of default loans in Portugal is to be put up for sale by Novo Banco.

The restructuring fund KKR won the race to buy €1.7Bn of Non-Performing Loans which Novo Banco put up for sale in September.

The contract between the bank and the fund should be signed by the end of this week.

With the sale and offload of NPLs off his books, Novo Banco CEO António Ramalho should reduce his level of distressed assets held by the bank to less than €7Bn this year.

This slice of debt dubbed ‘Project Nata’ consists of a wad of loans worth €1.7Bn which the bank believed improbable to claw back.

Three candidates were in the race to buy this portfolio: the private equity fund KKR, a consortium formed by Deutsche Bank/Arrow Global/ Carval, and Cerberus Capital Management.

KKR are also acting with service agency Hipoges owned by António Nogueira Leite and LXPartners. It is not the first KKR investment in Portugal. It recently bought the telecommunications operators Nowo and Oni from Apax and has investments in unicorn Outsystems.

The operation is likely to be carried out in two tranches according to the publication Debtwire in September. The first will have €550 million with loans from 54 large companies, while the second tranche of €1.2Bn refers to loan defaults from 62,000 companies.