Intrum has agreed a deal with Spanish bank Ibercaja Banco S.A. to purchase a portfolio of 6,400 real estate assets (REOs). The portfolio will be transferred to a new company (NewCo), initially majority owned by Intrum, with Residencial Murillo maintaining a minority equity stake. Intrum’s final investment will be approximately €30-40m once financing and co-investor are in place.
Mikael Ericson, President and CEO of Intrum said “We are very pleased to be able to add another important investment to our Spanish activities, which supports our 2020 financial targets on EPS and leverage. This deal came about as a result of an exclusive discussion between Intrum and Ibercaja and enables us to continue to develop our existing strategic partnership, and to extend the servicing contract for our subsidiary Aktua.”
Aktua has already been servicing the portfolio since Q2 2016. This servicing arrangement will now continue as the asset ownership transfers to Intrum. It ensures continuity and stability in collection performance.
Intrum will initially hold 80 per cent in the NewCo and Ibercaja will retain the remaining 20 per cent. Intrum’s investment will at closing be an amount of up to €215m. Intrum has a committed co-investor and is in the final stages of discussions with external financing for the NewCo, and expects to complete this early in Q1 2019. On completion of these discussions Intrum’s net investment will be reduced to approximately €30-40 million.
Financing will be provided to NewCo and secured against the portfolio and therefore not consolidated on Intrum’s balance sheet. There will be a short, temporary increase in Net Debt / Cash EBITDA of 0.2x from closing until financing and co-investor are in place. Intrum’s commitment to its 2020 leverage target remains firm.
Ibercaja is one of the top ten banking groups in Spain providing financial services to individuals, institutions, freelancers and SMEs through more than 1,100 branches across the country.