The English courts ruled that the fund will have to pay this amount, plus 48 million in interest, for a transaction in the midst of the toxic ‘brick’ drain after the 2008 crisis.
The giant Cerberus will have to pay more than €400 million to Banco Sabadell for the sale of several portfolios of toxic assets in 2019. The English courts have ordered the US fund to pay €358 million for the operation, in addition to €48 million for interest and the costs of the process, the resolution of which was announced on December 3rd..
The origin of this process lies in the drainage of toxic brick that Spanish entities carried out after the real estate bubble of 2008. Specifically, in 2018, Sabadell opened a bidding process to sell several portfolios -Challenger, Coliseum and Rex- with a gross value of around €6,414 million.
The properties were awarded and transferred to Cerberus in 2019 in exchange for a consideration of around €3.5 billion, although it was agreed to defer up to 21% of the amount (around €600 million) over time. Some of the properties included in the portfolios were not registered in the property register because they were in the process of repossession or undergoing auction.
The institution chaired by Josep Oliu had a period of three years, until the end of 2022, to resolve this situation, although it was brought forward in the case of the assets grouped in the Coliseum portfolio. Cerberus paid the deferred payment associated with it, between 170 and 180 million, so that the amount still pending payment fell to around €400 million.
Subsequently, Banco Sabadell complied with the registrations in Challenger and Rex on a package of properties valued at 365 million (91.25% of the total) and this is where the conflict began. The fund refused to pay the total of the remainder, claiming that it had not registered all the assets and therefore did not have to pay anything. The entity sued Cerberus in January 2023 in the High Court of Justice in England; the trial took place in early November, and now the judgement has been handed down.
The court decision, which comes in the midst of BBVA’s takeover bid, will have a positive impact for Sabadell in terms of reducing NPLs (non-performing loans), reducing provisions and increasing coverage, which will translate into an improvement in asset quality and the bank’s risk profile, the impact of which will be reflected in the accounts and balance sheet for the fourth quarter of the year.
Original Story: El Mundo | Author: Maria Hernandéz
Edition and translation: Prime Yield