Buyout groups Cerberus and J.C. Flowers plan to buy Germany’s troubled HSH Nordbank [HSH.UL] through separate vehicles for the lender’s core operations and its non-performing assets, people close to the matter said.
The state owners of HSH Nordbank are on the final stretches of exclusive talks with the private equity groups and said on Monday that they would inform the public about the sale on Wednesday.
To meet EU demands on the viability of HSH Nordbank after a sale, the lender will be sold without the less than 7 billion euros ($8.6 billion) of bad loans sitting in its internal ‘bad bank’, the sources said.
The bulk of the non-performing assets will, however, be bought by the investors using one or more other platforms.
That way, the ship financier would be able to decrease its non-performing loans to around 2 percent of its portfolio from 11.7 percent as of Sept 30.
That would also pave the way for an inclusion of HSH Nordbank in the deposit protection scheme of German banks, which HSH aims to join following the sale and the subsequent ejection from the protection scheme of Germany’ savings banks and landesbanks.
Last year, HSH Nordbank more than doubled its 2017 pre-tax profit to just below 300 million euros benefiting from an uptick in the shipping sector.