Intrum Justitia AB has confirmed that it has entered into a strategic partnership with Italian bank Intesa Sanpaolo creating a servicing agreement for non-performing loans (NPL) in Italy.
The deal has been accepted by the board of Directors of Intesa Sanpaolo and will see a merger of Intesa Sanpaolo’s NPL recovery operations and all of Intrum’s current Italian operations into a leading servicer of NPLs in Italy (Joint Venture Service). Intrum will own 51% of the Joint Venture Service.
The Joint Venture Service agreement will enter into a 10-year exclusive servicing agreement with Intesa Sanpaolo for the vast majority of the bank’s new NPL inflow during this period. Intrum will consolidate the Joint Venture Servicer in the financial reporting. Intrum, together with co-investor CarVal, will acquire a 51% participation of a NPL portfolio with a Gross Book Value (GBV) of EUR 10.8 billion to be deconsolidated from Intesa Sanpaolo. The portfolio will be held by a securitization Special Purpose Vehicle (SPV).
Mikael Ericson, President and CEO of Intrum said “This innovative transaction is a milestone for Intrum and provides us with long-term access to the large Italian Credit Management Services market. Together with Intesa Sanpaolo we are building a Credit Management Services provider in one of the largest European markets that will draw on our mutual strengths. The joint venture sets a new standard in the market where two experienced industrial players join forces to create a market leader servicer in Italy.”