MILAN (Reuters) – Italian bank UniCredit is set to sell 2 billion euros ($2.3 billion) in impaired debts to bad loan firm Prelios after halting a process to hire a manager for the portfolio, three sources close to the matter said on Wednesday.
The deal would mark an important step for Prelios, which bankers say is evaluating a possible initial public offering or a tie-up as its owner, U.S. investment fund Davidson Kempner, looks to cash out after its 2018 buyout of the Milan-based group.
A sale would lower UniCredit’s impaired loan burden close to 3.1% of total lending, based on Reuters calculations, compared with 3.6% at the end of December.
Both UniCredit and Prelios declined to comment.
The portfolio comprises so-called ‘unlikely to pay’ (UTP)loans, which are not yet in default but are deemed unlikely to be recovered in full, with an average size below 5 million euros each, the three sources said.
(Reporting by Valentina Za; editing by Agnieszka Flak)
