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Irish unit of Bain Capital sues Greek bank over loans

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Loans: Customers queue outside a Piraeus Bank branch in Thessaloniki, Greece. Photo: Konstantinos Tsakalidis/Bloomberg

Loans: Customers queue outside a Piraeus Bank branch in Thessaloniki, Greece. Photo: Konstantinos Tsakalidis/Bloomberg

Loans: Customers queue outside a Piraeus Bank branch in Thessaloniki, Greece. Photo: Konstantinos Tsakalidis/Bloomberg

An Ireland-based unit of US investment giant Bain Capital has sued Greece’s Piraeus Bank in a €34m action, claiming the Balkan institution breached warranties when it sold a portfolio of non-performing loans to the Irish firm.

Piraeus Bank is defending the action in London’s High Court and has insisted that the Irish firm has no basis for it and that the Greek institution has no liability.

The Bain entity, Dublin-based Amoeba Issuer, acquired a portfolio of €398m worth of non-performing loans held by Pireaus in 2018. Those loans had an original face value of €1.95bn.

That sale agreement, according to Piraeus, included a clause that any complaints regarding loan warranties must have been brought to the attention of Piraeus within 30 days of becoming aware of any alleged breaches. The Bain unit notified Piraeus of its claim in June last year.

Amoeba Issuer has claimed that it has found errors across a large portion of the loans it acquired under the deal with Piraeus.

The Irish vehicle has insisted that the warranties given to it were untrue and inaccurate.

All the loans acquired by Amoeba Issuer from Piraeus are property loans and all were for commercial assets in Greece. It was the first commercial property non-performing loan sale in Greece.

The 2019 accounts for Amoeba Issuer show that at the end of that year, the entity had €368.6m of financial assets at fair value, and €42.1m of cash on its books.

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At the end of 2019 there were 80 borrowers across the non-performing loans in the portfolio, compared to 85 in 2018. There was one borrower who accounted for 25pc of the total portfolio value at the end of 2019, according to the accounts, with no such single significant exposure listed in 2018.

“The company mitigates credit risk of the issuers of financial assets through its investment manager, which is continually reviewing and analysing the company’s existing positions to attempt to negotiate paydowns with the borrowers, identify issues early on and to take action to liquidate the collateral and apply the proceeds to the outstanding debt where necessary,” the accounts note.

The accounts also show that of its €42.1m in cash held at the end of 2019, €40.1m was held with Ulster Bank and just under €2m with Piraeus Bank.

Amoeba Issuer has claimed in in its case that it raised the alleged warranty breaches in two occasions with Piraeus Bank, and has insisted that the Greek bank refused to address any of the claims, according to legal news site Law360.


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