ATHENS, Feb 8 (Reuters) - Eurobank, Greece’s third-largest lender by assets, said on Friday that its takeover of Grivalia Properties was given the green light by the European Union’s competition authority because it meets state aid rules.
Eurobank agreed in November a 780 million euro ($884.9 million) deal to buy Grivalia Properties to boost its capital and speed up the reduction of sour loans. nL8N1Y012E]
Toronto-based Fairfax Financial Holdings, which owns 18.23 percent of Eurobank and 51.43 percent of Grivalia, will hold 32.93 percent of the merged company.
“The European Commission considered that the strengthening of Eurobank’s capital base through the merger will enable Eurobank to significantly reduce its non-performing loans in the near future,” the bank said.
Eurobank sees the deal helping it cut its ratio of bad loans to 15 percent by the end of 2019 from 39 percent in last year’s third quarter, and reducing it further to single digits by 2021.
The merged company will securitise about 7 billion euros of deeply delinquent loans and transfer them to a special purpose vehicle, issuing senior mezzanine and junior notes. (Reporting by George Georgiopoulos, editing by Louise Heavens)