Balbec Capital LP is in the running for LX Partners' misfortune

Balbec Capital LP is negotiating to buy LX Partners' distressed credit portfolio, the total value of which has been announced at €4.2 billion, of which four billion is credit related. Unsecured (Without guarantees) and another 200 million on credit Believer (With guarantees).

This deal has been called the largest non-performing loan deal (Non-performing loans) from the market.

The Echo newspaper reported that LX Partners decided to remove manager Algebra Capital from the deal, having already selected the buyer for its €4.2 billion bad credit portfolios. The case relates to problematic assets acquired in recent years by LX Partners from Portuguese banks, which Eco says is a company with a net worth of 200 million euros.

The buyer, according to Jornal Economico, is the Balbec Fund, which initially made an offer only for what in market vernacular is called a back book (credits portfolio) and which was excluded when the initial intention was to sell credits and algebra services.

As reported by Economico, the sale of the distressed mega-portfolio was conditional on the sale of the service led by Bernardo Simoes and Algebra Capital, and the values ​​offered by the platform were much lower than what shareholders wanted, meaning the business was at risk.

The Echo newspaper revealed that they will be a consortium of Cerberus, Intrum and Vensolutia; That Carval and White Star. and the LCM Fund (which has Link Financial as its service) to stage binding offers to acquire the distressed business worth €4.2 billion of LX Partners in Portugal. These three are unemployed. Because, according to our sources, the proposal that best evaluates the distressed portfolio (without Algebra Capital) is the proposal from the North American fund Balpik Capital.

Candidates were invited to submit separate proposals, one for the NPL (non-performing loans) portfolio of the LX Partners fund and another for the platform that manages these assets, although the process that was in the market was to sell both together.

But the finalists of the competition already have secured and unsecured credit recovery and management services and company, specializing in AdvisorAnd analysis service NPL, is not attractive for candidates. This fact is related to the fact that it is a company that replicates an activity that the three candidates are already practicing, with what makes the matter more complicated being that it is a heavy company in terms of employees, according to sources linked to the process.

The proposals submitted to Algebra, a company that manages €4.5 billion in assets, fell far short of the intended target. This is why the business started in October has not yet closed, which justifies the change in the business model of selling the NPL portfolio without a servicer. Jornal Económico tried to contact Bernardo Simoes, Partner at LX Partners and Managing Director of Algebra Capital, but to no avail.

According to our sources, the candidates aim to conclude the purchase and sale agreement by the end of March.

Currently, there are two other deals in the sector in the pipeline, DoValue Portugal and Hipoges.