Sunday 22 October 2017

AIB offered only half the value of €500m loans in debt deadline bid

Donal O'Donovan

Donal O'Donovan

State-owned AIB has been offered as little as 50c in the euro for €500m of UK loans it is trying to sell to meet Central Bank-imposed "deleveraging" deadlines.

First-round bids were received on Friday according to a report in CoStar Finance, a UK-based real estate news and information provider.

There is strong interest in the portfolio with 20 bids submitted from hedge funds, private equity firms and banks.

According to CoStar, bids range from 50c in the euro to 65c in the euro for the portfolio, but it warns that offers tend to fall in a second round of bidding.

Some of the firms bidding are increasingly familiar names on the Irish business scene.

They include Bank of Ireland shareholder Kennedy Wilson. It is understood to have made a joint bid with Deutsche Bank for the AIB loans.

In June Kennedy Wilson and Deutsche Bank paid Ulster Bank €61m for loans with a face value of €360m in a separate deal.

A second bidder is Blackstone Group. In June it became the biggest shareholder in Eircom when the telecoms company was handed to its creditors.

Bidders

Cerberus Capital Management, Lone Star, Starwood Capital, Goldman Sachs Whitehall Funds, Chenavari and Forum Partners have also been named among 20 bids submitted to Citigroup, which is managing the sale for AIB.

Citi will shortlist three bidders to go forward to a second round before settling on a final buyer.

AIB is also currently seeking buyers for a €675m portfolio of mainly Irish loans, which has been on the market through Morgan Stanley in May.

The sales come after the Central Bank ordered the bank to sell "non-core assets" with a face value of €20bn by the end of 2013.

Morgan Stanley itself is closing in on a deal to take formal ownership of a London office block linked to controversial property investors Brian and Mary Patricia O'Donnell.

The €160m offices at 15 Westferry is among the most prized parts of the €1bn property empire built up by the couple during the boom.

The O'Donnell's have controversially applied to be declared bankrupt in the UK at the same time Bank of Ireland was pursuing them through the Irish courts for €70m of debt.

As part of the case, Bank of Ireland tried but failed to secure a share in the building in lieu of €75m owed by an O'Donnell family trust.

A market filing shows Morgan Stanley, which has a mortgage on the office block, looks set to formally take control of the building on July 16, after extending a standstill agreement not to enforce security on the asset for just one week on July 9.

Irish Independent

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