UniCredit looking for partners for bad debt unit-sources

MILAN Fri Feb 7, 2014 11:26am EST

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MILAN Feb 7 (Reuters) - Italy's UniCredit is looking for partners interested in its unit that manages problematic debt for the group and other entities and will ask for bids by the end of this month, two sources close to the matter said on Friday.

Italy's biggest bank by assets, which is already working on several transactions to move bad debt off its balance sheet, aims to find buyers for part or all of its Credit Management Bank unit, according to the sources.

UniCredit declined to comment.

The unit, based in Verona, manages more than 40 billion euros ($54.4 billion) in bad debt.

"My understanding is that UniCredit will contact potential investors and ask them to submit bids by the end of February," one of the sources said.

The deal could be a way for UniCredit to free up capital that is now held to back the problematic loans managed by the unit. Selling a stake in the unit could pave the way for the investor taking up parts of UniCredit's bad debt portfolio in the future, according to one source.

In December a top executive at Italy's Cerved Group , a company that provides business data to clients and advises banks and companies on credit management, told Reuters it was interested in Credit Management Bank.

The disposal of a stake in Credit Management Bank would add to other initiatives UniCredit is working on to improve the management of its loans and to free up funds to increase lending to Italian companies.

"The debate on how to manage and reduce problematic debt is eventually heating up and UniCredit is getting ready," the lender's Chief Executive Federico Ghizzoni said on Friday, without commenting on specific transactions.

($1 = 0.7353 euros) (Reporting by Francesca Landini, Massimo Gaia and Elisa Anzolin; Editing by Elaine Hardcastle)

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