Thursday, February 2

The FROB makes an offer for all Sareb shares and values ​​them at less than 400 euros

The Fund for Orderly Bank Restructuring (FROB) has made an offer to acquire all the shares of the Asset Management Company from the Bank Restructuring (Sareb), at a rate of 1 cent for every 39,710 shares, as confirmed to Europa Press in financial sources.

The FROB controls 45.9% of Sareb, while the rest of the capital of the company is in the hands of private shareholders, such as Santander (22.23%), CaixaBank (12.24%), Sabadell (6.61%), Kutxabank (2.53%), Ibercaja (1.43%), Bankinter (1.37% ), Unicaja Banco (1.27%), Cajamar (1.21%), Mapfre (1.11%) and 17 other banking and insurance entities with packages of less than 1%.

On January 18, the Government approved a legal change that allows it to take control of Sareb, after its reclassification in the public accounts due to the change in the statistical consideration by Eurostat, which has forced to assume as public debt the almost 35,000 million that Sareb had pending repayment at the end of 2020.

As reported by ‘La Vanguardia’, this week Sareb’s private shareholders received a letter from FROB announcing its decision to launch a formal offer for all the shares of the so-called ‘bad bank’ for a symbolic price of 1 cent for every 39,710 shares.

Following the conversion into capital of subordinated debt in July 2021, Sareb’s share capital is divided into 1,429,560,000 shares, which means valuing the ‘bad bank’ at a symbolic price of almost 360 euros, of which the FROB would pay a maximum of 194.35 euros (54.1%).

Sareb’s shareholder banks must decide whether to sell their stake in FROB, which have already been fully provisioned. Getting rid of all their shares in Sareb would cause the big banks to lose the deferred tax assets (DTA) that the deterioration of their participation has generated and that could provide them with tax relief in the future.

In its letter, the FROB maintains that, If the objective of 100% of the capital is not reached, the conditions of the future processes will not be better than those included in the current offer.

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Sareb was created in 2012 to recapitalize the financial institutions most affected by the 2008 financial crisis, for which it acquired 98,211 assets valued at 50,781 million euros. It has the mandate to generate sufficient income, through the sale and management of these assets, to repay the debt issued at the start of its activity, a goal that it should meet before its liquidation, scheduled for 2027.

At the end of 2020, Sareb had a negative net worth of 10,500 million and had pending repayment of 34,918 million euros. In its latest activity report, the company admits the impossibility of generating sufficient cash flows to fully repay the debt issued by the company before the term for its liquidation expires in 2027.