Sales of AIB loans collapse as bids fail to reach minimum price
The sale of a portfolio of non- performing AIB loans in the UK has collapsed for a second and final time after the bank failed to attract last-minute bids for its minimum price.
The bank shelved the sale of the £100 million (€125 million) loans after two final bidders – US property firm Kennedy Wilson and Deutsche Bank acting jointly and private equity firm Cerberus Capital Management – failed to meet the bank’s 40p in the pound reserve price.
The reluctance of bidders to meet AIB’s price for the so-called “Project Pivot” book reflected the poor quality of the remaining loans and underlying assets, according to property news website CoStar which reported the sale’s collapse.
The final bids were significantly below AIB’s minimum price which represented a 60 per cent haircut. AIB declined to comment on the decision to shelve the sale.
This marks a setback for the State-controlled bank’s “deleveraging” of €20.5 billion of loans and other assets as it shrinks itself back to sustainability.
The portfolio of property-related company loans had already been reduced since first bids last June.
The bank said last week that it had completed 80 per cent of the three-year deleveraging target set under the March 2011 stress tests.