July 6, 2018 / 6:16 PM / 3 months ago

Six offers expected for Banco BPM debt recovery business - sources

MILAN, July 6 (Reuters) - Six offers are expected from investors interested in the debt collection business of Italy’s Banco BPM and its remaining bad loans, sources close to the deal said on Friday.

Italy’s third largest bank, created last year from the merger of Banco Popolare and Banca Popolare di Milano, has lagged bigger rivals in reducing its bad debts.

It has put a last batch of 3.5 billion euros ($4.1 billion) in bad debts on the block, but has the option of shedding a much bigger amount and cushioning the hit on its capital with the sale of its debt collection business.

Reuters reported that bidders were expected to take on bad loans for an amount close to the top of a 3.5-10 billion euro ($41 billion) range set by the Italian bank.

The sources told Reuters that Banco BPM would be ready to sell all of the 10 billion euros as well as the entire unit.

Offers will be made by Pimco and Phoenix Investment Partners, private equity firm TPG Capital together with Davidson Kempner Capital Management and Prelios, Vaerde Partner and Guber, Italian bad loan specialist Credito Fondiario and Elliott Management Corporation, Cerberus Capital Management and doBank and Fortress investment group.

One of the sources said that the deadline for offers would be postponed to Wednesday, from Tuesday. Other sources said the bank aimed to shortlist three of the offers.

Banco BPM Chief Executive Giuseppe Castagna has said the process would be lengthy. ($1 = 0.8515 euros) ($1 = 0.8519 euros) (Reporting by Massimo Gaia, writing by Giulia Segreti, editing by Alexander Smith)

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