The deal will beef up assets managed by Prelios just as the group evaluates a possible initial public offering or a tie-up to allow its owner – U.S. investment fund Davidson Kempner Capital Management – to cash out, bankers said.
New York-based DK took Prelios private in 2018 after launching a buyout offer for the Milan-based group, which is one of Italy’s leading bad loan managers.
Some 250 billion euros in impaired loans offloaded by the country’s lenders in the past few years have turned Italy into Europe’s biggest market for distressed bank debt.
A sale would lower UniCredit’s impaired loans close to 3.1% of total lending, based on Reuters calculations, compared with 3.6% at the end of December when they totalled 16 billion euros. That compares with 61 billion euros in mid-2016 when UniCredit embarked on a restructuring.
Both UniCredit and Prelios declined to comment.
The portfolio comprises “unlikely to pay” (UTP) loans, which are not yet in default but are unlikely to be repaid in full, with an average size below 5 million euros each, the three sources said.
